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of <h1>Service tax demand deemed unjustified prior to 1-5-2006. Commissioner's order upheld.</h1> <h3>CCE., HYDERABAD Versus SATHGURU MANAGEMENT CONSULTANTS PVT. LTD.</h3> The Tribunal dismissed the Revenue's appeal, ruling that the services provided by the appellants were taxable only from 1-5-2006. Any demand for service ... Liability before levy - Held that: - services came into service tax net only with effect from 1-5-2006 and a demand to levy the service tax retrospectively under other categories such as ‘Business Auxiliary Service” is not justified - appeal dismissed - decided against Revenue. Issues:1. Whether the services provided by the appellants fall under the category of 'Business Auxiliary Services' for the purpose of service tax.2. Whether the demand for service tax, education cess, interest, and penalties imposed by the Deputy Commissioner of Service Tax is justified.3. Whether the order of the Commissioner (Appeals) dropping the proceedings against the appellants is valid.4. Whether the Revenue's appeal against the order of the Commissioner (Appeals) has merit.Analysis:1. The appellants provided services as a 'Share Transfer Agent' and 'Registrar to Issues.' The Revenue contended that these services should be classified as 'Business Auxiliary Services.' The Deputy Commissioner of Service Tax confirmed a demand for service tax, education cess, interest, and penalties. However, the Commissioner (Appeals) ruled in favor of the appellants, stating that since the services became taxable only from 1-5-2006, the levy of service tax under any other category before this date was not justified.2. The Revenue appealed the Commissioner (Appeals) decision, arguing that the services provided by the appellants should be considered incidental auxiliary support services related to the public offer and purchase of shares, falling under the category of 'Business Auxiliary Services.' The Tribunal considered the effective date of the services coming under the service tax net, which was 1-5-2006. Referring to relevant documents and a previous tribunal decision, the Tribunal concluded that the demand for retrospective levy of service tax under the 'Business Auxiliary Services' category was not justified. Consequently, the Revenue's appeal was dismissed.3. The Tribunal's decision was based on the fact that the services provided by the appellants were brought under the service tax net only from 1-5-2006. The Tribunal considered the Finance Minister's speech, Board's Circular, and a previous tribunal decision to support its ruling. It was held that imposing service tax retrospectively under a different category before the effective date was not valid. Therefore, the order of the Commissioner (Appeals) dropping the proceedings against the appellants was upheld.In conclusion, the Tribunal dismissed the Revenue's appeal, emphasizing that the services provided by the appellants fell under the service tax net only from 1-5-2006, and any demand for service tax before this date under the 'Business Auxiliary Services' category was not justified.
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