Tribunal Upholds Service Tax Liability Decision under Notification No. 13/2003-S.T.

The Tribunal upheld the decision on service tax liability under Notification No. 13/2003-S.T., confirming the appellants' obligation to pay service tax for providing business auxiliary services. However, the Tribunal granted relief to the appellants by waiving penalties under the Amnesty Scheme, as they were deemed eligible based on relevant case laws. The judgment was delivered by Member (T) Shri B.S.V. Murthy on 8-5-2008.

---

---

Issues:
1. Claim for exemption under Notification No. 13/2003-S.T.
2. Claim for waiver of penalty under Circular No. 137/39/2004-CX.4

Claim for Exemption under Notification No. 13/2003-S.T.:
The appellants provided 'business auxiliary service' to a company and contended that they were exempt from service tax under Notification No. 13/2003-S.T. The Commissioner (Appeals) found that the services provided fell under the category of business auxiliary service and were chargeable to service tax. The appellants argued that they acted as commission agents and were exempt from service tax during a specific period. However, it was established that the exemption applied to commission agents dealing with goods, not services. The appellants' services involved networking, marketing, sales, and distribution of services, not goods, making them ineligible for the exemption. The Commissioner's decision to confirm the demand and interest was upheld.

Claim for Waiver of Penalty under Circular No. 137/39/2004-CX.4:
The appellants sought a waiver of penalties under an Amnesty Scheme declared by the Government. The Commissioner (Appeals) initially rejected the claim, citing that the appellants obtained service tax registration before the scheme's implementation. However, the Tribunal held that the appellants were eligible for the Amnesty Scheme benefits based on relevant case laws. Consequently, no penalty was imposed on the appellants under Sections 76, 77, and 78 of the Finance Act, 1994. The Tribunal ruled in favor of the appellants concerning the penalties imposed.

In conclusion, the Tribunal upheld the decision regarding the service tax liability under Notification No. 13/2003-S.T. and granted relief to the appellants by waiving the penalties as per the Amnesty Scheme. The judgment was pronounced on 8-5-2008 by Member (T) Shri B.S.V. Murthy.

---