TaxTMI 
TaxTMI 
2010 (10) TMI 348
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....ransfer" basis providing online transaction access or facility in respect of utility bills/tax payments, issue of certificates etc. besides generation of various types of MIS reports. These services were provided under an agreement dated 19-5-2003 between UTL and Director e-Seva, Hyderabad. E-Seva Project is implemented by the Government of Andhra Pradesh. Under a letter dated 20-12-2005 addressed to the jurisdictional officers of the department, UTL had explained the scope of the e-Seva project as follows :- (i) Procurement and installation of hardware, like servers for setting up 51 Integrated Citizens Service Centres (ICSC) in three districts spanning 23 Municipalities. (ii) Networking the different ICSCs and connecting the backend services of the associated departments and agencies. (iii) Implementation of the solution and training of the project personnel in running the application. (iv) Owning and maintaining of the system on a turnkey basis including supply of consumables stationary and media, and other material essentially to provide the services and meeting the cost of electricity, telecommunication, water, house keeping, security an....
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....were not covered under the category "Online information and database Access or Retrieval" and allowed the appeal filed by UTL under order-in-appeal No. 29/2007(H)(ii)-ST, dated 31-7-2007. A similar demand for the subsequent period up to June 2006 was also set aside by the Commissioner (Appeals) vide order-in-appeal No. 45/2007(H)(ii)-ST, dated 16-12-2007 on same grounds. Commissioner (Appeals) observed that the appellants could be providing taxable services but the classification was not "Online information and database access or retrieval". The show-cause notice basic to the subject proceedings was issued on the basis that the orders of the Commissioner (Appeals) were no bar for initiating fresh proceedings for demand of service tax under the category "Business Auxiliary Services". 3. In the impugned order, the Commissioner rejected the plea of the appellants that the impugned proceedings could not have validly invoked extended period for demanding service tax on the reasoning that the present show-cause notice had not invoked extended period for a 'subsequent period.' He also rejected the claim of the assessee that the proceedings were fundamentally flawed as the show-c....
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....in the impugned order, the adjudicating authority had not decided as to under which of the sub-clauses (i) to (vi) of entry under section 65(19), the impugned services could be classified. There was no classification of the service under any of the sub-clauses (i) to (vi) of section 65(19). Therefore, the same could not be classified under sub-clause (vii) of section 65(19) as well. (iv) UTL did not recover any amount from the citizens towards the services it rendered. There was no contract between UTL and the citizens. There was no privity of contract as principal and agent between the participating entities and the UTL. (v) It is submitted that the findings of the Commissioner that the appellant rendered customer care services on behalf of the client, of sub-clause (iii), clause (19) of section 65 was not justified. The Director e-Seva, a public authority, merely provided certain facilitation services to the citizens. The Government itself did not earn any revenue from e-Seva service. Moreover, the show-cause notice had not alleged that the demand of tax was on treating the alleged activity as customer care provided by the appellant. The demand was made treati....
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....y perused the records and studied the rival submissions. The appellant is engaged in operating what is called 'glorified cash counters' by the Revenue, in facilitating the payment of utility bills such as electricity bills, telephone bills etc., issuance of certificates/licenses such as birth/death certificates, driving licenses, and issue of cinema tickets, bus tickets etc., at e-Seva counters. The transactions entered into by UTL are recorded in the database of the respective participating entities such as BSNL, APTRANSCO, etc. These activities are carried out under an agreement with Director e-Seva, functioning under the AP State Government. The appellants are paid on a monthly basis depending on the number of transactions put through. We have no doubt that UTL renders a service to Director e-Seva and receives consideration for the same. This could be a taxable service as found by the lower appellate authority. We note that the demand is confirmed against the assessee under the category "Business Auxiliary Services". The statutory provisions relating to "Business Auxiliary Services" are reproduced below: "business auxiliary service" means any service in relation to,- (....
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....r held that the appellant updating the database of BSNL or Airtel or APTRANSCO amounted to maintaining their accounts. 7. We find that service tax under the head "Business Auxiliary Services" can be collected on the following activities: "(i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production or processing of goods for, or on behalf of, the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any activity that amounts ....