Agricultural Marketing Society not liable for service tax on facilitation services. Tribunal sets aside all demands.

The Agricultural Marketing Society was found not liable to pay service tax for "Auctioneer's Service" and "Business Support Service" as they were facilitating tenders, not auctioning property. The demands, penalties under Section 77 and 78 of the Finance Act, 1994, and late fees for non-filing of ST-3 returns were deemed unsustainable. The Tribunal allowed the appeal, setting aside all demands, interest, penalties, and late fees.

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Issues:
1. Whether the Agricultural Marketing Society is liable to pay service tax for "Auctioneer's Service" and "Business Support Service"Rs.
2. Whether penalties imposed under Section 77 and 78 of the Finance Act, 1994 are justifiedRs.
3. Whether the late fee for non-filing of ST-3 returns under Section 70 of the Finance Act read with Rule 7C of the Service Tax Rules, 1994 is applicableRs.

Analysis:
1. The case involved allegations against an Agricultural Marketing Society for not discharging service tax liability for "Auctioneer's Service" and "Business Support Service." The department issued a show cause notice demanding service tax for the period from 1.5.2006 to 31.3.2011. The society contended that they were not auctioning any property but facilitating marketing of agricultural produce through tenders. The Tribunal noted that the society was not providing auction services but facilitating tenders, thus the demands on both counts were found unsustainable. The appeal was allowed, setting aside the demands, interest, and penalties.

2. The Ld. Commissioner had confirmed the demands, imposed penalties under Section 77 and 78 of the Finance Act, 1994, and ordered the collection of late fees. However, the Tribunal found that since the demands themselves were not sustainable, the penalties and late fee were not justified. The impugned order was set aside, and the appeal was allowed with consequential relief as per law.

3. The society argued that they were lending money to their members and collecting charges for appraising the value of pledged jewels, which did not constitute "Business Support Service." They contended that they were not supporting another bank's business but conducting their own lending operations. The Tribunal agreed with this argument, emphasizing that the society was not providing services to others but conducting its own business activities. Consequently, the demands for Business Support Service were deemed unsustainable, leading to the allowance of the appeal with appropriate relief.

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