Tribunal upholds tax liability for Business Auxiliary Service but grants exemption for services to UNICEF.

The tribunal partially allowed the appeal, upholding tax liability under Business Auxiliary Service for services provided on behalf of clients. However, the exemption under Notification No. 16/2002-ST for services provided to UNICEF through a third party was granted, ruling in favor of the appellant on this issue.

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Issues:
1. Taxability of services provided on behalf of clients under Business Auxiliary Service.
2. Denial of exemption under Notification No. 16/2002-ST for services provided to UNICEF.

Analysis:

Issue 1: Taxability of services provided on behalf of clients under Business Auxiliary Service
The appeal challenged a tax demand related to services provided by the appellant to clients through event managing parties. The services included road shows and events carried out by the appellant on behalf of main parties like M/s Rural Communication Marketing Pvt. Ltd. and M/s Lintas India (P) Ltd. The dispute centered on whether the services rendered by the appellant should be taxed as Business Auxiliary Service (BAS) under Section 65(19)(vi) for providing services on behalf of the client. The appellant argued that since the main parties charged the full amount for the services along with service tax from the main client, they should not be considered intermediaries for tax under BAS. However, the tribunal disagreed, stating that the services were indeed rendered on behalf of the main parties to the main client, falling within the scope of BAS. While acknowledging the appellant's argument regarding the full payment of service tax by the main parties, the tribunal held the appellant liable for service tax under BAS.

Issue 2: Denial of exemption under Notification No. 16/2002-ST for services provided to UNICEF
The second issue revolved around the denial of exemption under Notification No. 16/2002-ST for services provided by the appellant to UNICEF through M/s Lintas India (P) Ltd. The lower authorities had rejected the exemption claim, contending that the services were not directly provided to UNICEF. However, the tribunal examined the bills raised by the appellant, which clearly indicated that the services were for UNICEF, despite being invoiced through M/s Lintas India (P) Ltd. The tribunal noted that the nature of the services, such as branding costs for UNICEF activities, demonstrated that the services were indeed intended for UNICEF. Consequently, the tribunal accepted the appellant's claim for exemption under Notification No. 16/2002-ST, ruling in favor of the appellant on this issue.

In conclusion, the tribunal partially allowed the appeal, upholding the tax liability under BAS for services provided on behalf of clients while granting the exemption under Notification No. 16/2002-ST for services rendered to UNICEF through M/s Lintas India (P) Ltd.

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