2022 (4) TMI 477 - AT - Service Tax

CESTAT Bangalore rules in favor of appellant, services not taxable under 'Business Auxiliary Service' category. Precedents cited.

Bharat Chipli Versus C.C.E & C.S.T. -Bangalore Service Tax- I

The CESTAT Bangalore ruled in favor of the appellant, determining that the services provided for promotion and marketing activities were not taxable under ... Levy of Service Tax - Business Auxiliary Services or not - services of promotion or marking of goods/services - HELD THAT:- The issue is no more res integra as the very same issue was considered by the learned Kolkata Bench of the CESTAT in the case of SOURAV GANGULY VERSUS COMMISSIONER OF SERVICE TAX, KOLKATA (NOW COMMISSIONER OF CENTRAL GOODS & SERVICE TAX & CENTRAL EXCISE, KOLKATA SOUTH) [2020 (12) TMI 534 - CESTAT KOLKATA] wherein, the issue has been decided in favour of a similarly placed taxpayer. The learned Kolkata Bench has elaborately considered the relevant provisions as well as orders of various Benches of CESTAT and also that of the decision of the Hon’ble Bombay High Court in the case of INDIAN NATIONAL SHIPOWNERS' ASSOCIATION VERSUS UNION OF INDIA [2009 (3) TMI 29 - BOMBAY HIGH COURT] wherein it has been held that the activity of the appellant therein could not be subjected to levy of service tax under Business Auxiliary Service prior to July 1st, 2010. Thus, there is no liability on the appellant and hence, demands raised for both the periods cannot sustain - appeal allowed - decided in favor of appellant. Issues:1. Taxability of services provided by the appellant for promotion and marketing activities under Section 65(105)(zzb) of the Finance Act, 1994.2. Liability under the category of 'Business Auxiliary Service' as per Section 65(19) of the Finance Act, 1994.Analysis:1. The appellant received a show-cause notice alleging taxable services provided for promotion and marketing activities based on agreements with players, franchisees, and MOUs. The demand included service tax for two periods, along with interest and penalties. Despite the appellant's detailed denial of liability, the Order-in-Original confirmed the demand. The First Appellate Authority upheld this decision, leading the appellant to appeal before the CESTAT Bangalore.2. During the hearing, the appellant's advocate argued that a similar issue had been decided in favor of a taxpayer by the Kolkata Bench of the CESTAT. Citing the case of Sourav Ganguly Vs. Commissioner of Central Goods & Service Tax, the advocate highlighted the decision that activities similar to the appellant's were not liable for service tax under Business Auxiliary Service before July 1st, 2010. Referring to the judgment of the Hon'ble Bombay High Court in the case of Indian National Shipowners' Association Vs. Union of India, the advocate contended that the appellant's activities did not attract service tax. The CESTAT Bangalore, in agreement with the advocate's contentions and following the Kolkata Bench's decision, held that there was no liability on the appellant. Consequently, the demands raised for both periods were deemed unsustainable.3. The CESTAT Bangalore set aside the impugned order, allowing the appeal with any consequential benefits as per the law. The judgment was pronounced in the Open Court on 31/03/2022.