Exemption claim may be raised in appeal where Notification No. 6/2005-ST applies and taxable value stays below threshold.

A legal claim for exemption under Notification No. 6/2005-ST could be raised for the first time in appeal, because the issue was one of law and the notification was otherwise applicable on the facts. The assessee's activity was treated as Business Auxiliary Service, but the quantified value of taxable service remained below the threshold prescribed by the notification, so the service tax demand could not be sustained. The appellate claim for exemption was therefore accepted, and the revenue's challenge to denial of that benefit failed.

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Issues: Whether the assessee could claim the benefit of Notification No. 6/2005-ST for the first time in appeal and, if so, whether the service tax demand could be sustained.

Analysis: The assessee's activity was treated as falling under Business Auxiliary Service, but the decisive question was whether the exemption under Notification No. 6/2005-ST was available. The value of taxable service, as quantified by the department, was below the threshold prescribed by the notification. The plea for exemption was a legal one and could be raised at the appellate stage, and the revenue did not dispute that the notification was otherwise available on the facts.

Conclusion: The assessee was entitled to the exemption under Notification No. 6/2005-ST, and the revenue's challenge to the grant of that benefit failed.

Ratio Decidendi: A legal claim for exemption under an otherwise applicable notification may be raised for the first time in appeal, and the benefit cannot be denied merely because it was not claimed before the original authority.

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