Joint venture service tax liability rejected where the same forward contract activity had already been taxed once.

Service tax was held not payable on the appellant's share from a joint venture arrangement for forward contract services because the agreement was treated as a true joint venture, not an independent commission agency or business auxiliary service. The tribunal noted that the service activity had already suffered tax in the hands of the co-venturer, and the same transaction could not be taxed again under a different category. The exemption notifications relied on by the appellant were also read as supporting non-liability on the facts, making the demand unsustainable.

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Issues: Whether service tax was payable on the appellant's share arising from the joint venture arrangement for forward contract services, and whether the exemption notifications covered the activity.

Analysis: The appellant was treated as liable under Business Auxiliary Service on the footing that it acted as a separate commission agent or business associate. The agreement was, however, read as establishing a joint venture relationship in which the service activity had already suffered tax at the hands of the co-venturer. The same transaction could not be subjected to tax again under a different category. The cited notifications were taken into account, including those relied upon by the appellant, and they were found to support non-liability on the facts of the case.

Conclusion: Service tax was not payable by the appellant, and the demand was unsustainable.

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