AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2013 (12) TMI 736
X X X X Extracts X X X X
X X X X Extracts X X X X
....generally in business public and pvt. organizations who wish to make benefits in kind available to the employees. The assessee entered into agreement with such customers. The customers as per their requirement purchase the meal vouchers from the assessee. The assessee entered into agreement with such customers. The customers as per their requirement purchase the meal vouchers from the assessee. The assessee charges in addition to the face value of the meal vouchers certain amount as service charges as also delivery charges. The customers in turn distribute such meal vouchers to their employees as per the terms of the employment. The employees (hereinafter termed as 'user') in turn uses such vouchers for purchase of food from one of the affiliates. These vouchers are not honoured by the business establishment in general but only by the affiliates of the assessee. Thus the user has no option but to purchase the goods and other services from one of the affiliates of the assessee. One of the advantage of this system is that such meal vouchers are considered as fringe benefit for employees. The value of such vouchers is therefore, not taxable in the hands of user under the income tax la....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee is that their services are similar to Credit/Debit cards and therefore such transactions are not covered under the purview of the service tax prior to 1.5.2006. The assessee have also stated that they have been suo motu paying service tax on their services under the category of "Supports Services of Business or Commerce" from 1.5.2006 onwards. They have contended that since their service is covered under the business support services from1.5.2006, the said service cannot be taxed under any pre existing category before 1.5.2006. In support of this contention, they had cited certain judgements. Another contention is that providing a list of affiliates does not amount to promotion or marketing of affiliates as it is merely a facilitating mechanism. In support of this contention also they have cited case laws. The assessee have contended that purpose of providing list of affiliates is not promoting the business of affiliates but is for convenience of users. The other contention is that vouchers are nothing but an alternative payment mechanism, similar to credit/debit cards and therefore such instruments cannot be taxed under the category of Business Auxiliary Services. They have a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... demands have been correctly raised in the demand notice. Since services are classifiable under Business auxiliary service, their arguments about preexisting entry, invocation of large period etc. will not hold water. He further submitted that just mentioning about vouchers business while taking centralized registration for outdoor catering service does not imply that they have informed the department about all the activities. The purpose of taking centralized registration is to get registration certificate at one place for all its branches relating to outdoor catering service. At this point of time, the departmental officials are expected to process the application form registration angle alone and not from the angle about various services provided and their taxability. In view of this position, the extended period has been correctly invoked. The ld. A.R. further argued that the adjudicating authority has incorrectly dropped the demand by only examining that the services are not classifiable under clause (vi) of Business Auxiliary services. It was the duty of the adjudicating authority to examine various clauses under business auxiliary services and then decide the issue. Ld. A.R.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a scheme/restrictions viz. purchase of vouchers by employer and purchaser of goods and services by employee from affiliates itself promotes the sale of goods and services of the affiliates and therefore meal vouchers of the assessee definitely helps in promoting sale of goods and services of assesses affiliates. We therefore have no hesitation in holding that the assessee are providing business auxiliary service to its affiliates. 9. The ld. Counsel for the assessee has given a lot of emphasis that these vouchers are similar to credit/debit cards. We do not find any merit in this contention. Credit/debit card are nothing but substitute of carrying the cash by an individual. The credit/debit card holder directly pays to the bank and the bank in turn pays the amount to the shop and establishment. Thus in case of credit/debit card, the user has wide option to go practically to any business establishment and buy any goods or service. In the case of assessee' voucher, user is constrained to go and buy goods/services from the assessee's affiliates and that also buy meal/other gift. In case of credit/debit card, card holder pays to the bank. Further in case of voucher, it is not the u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ular wording in the said definition, their services are covered. Prima facie, we are of the view that their services are not covered under the said definition of business support service. In any case, since we have held that services provided by the assessee are covered under business auxiliary service and at the relevant time business support service was not in existence, we consider it unnecessary to go into any further discussion on this issue. 12. Ld. Counsel has given a lot of emphasis and cited certain judgements to argue the point that once a new entry is introduced covering a particular activity without amending the earlier entry. It cannot be said that earlier entry covered the subsequently introduced entry. We are of the view that this proposition may be true in certain situation while in certain situations while in other situations, this may not be true. After the introduction of Finance Act, 1994 practically every year new services were introduced in the service tax net. The introduction of new service did not bear any specific pattern or coverage to particularly sector. In Central Excise Tariff as also Customs Tariff, the classification is based upon scientific p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ture of work that was required to be carried out could not be strictly said to be a service in relation to mining of mineral, oil or gas. It is in this context that the Court has made certain observation. Another case cited by the ld. counsel is Cameo Corporation Services Ltd. vs. Commr. of Service Tax, Chennai reported in 2008 (11) S.T.R. 161 (Tri-Chennai). In this case, the issue before the Tribunal was, whether Share transfer agent service which was introduced with effect from 1.5.2006 could be covered under Business Auxiliary Services prior to that date Share Transfer Agents are a separate category and they do the work for their own and registered with SEBI and it is in this context, the Tribunal held that this cannot be covered under Business Auxiliary Services and made certain observations. Similarly in the case of CCE vs. Trumac Engg. Co. Pvt. Ltd. reported in 2008 (10) STR 148 (Tri-Ahmd.) the issue was between the Consulting Engineer Service and intellectual property service w.e.f. 10.9.2004. The fees and royalty paid for technical know-how was not to be covered under Consulting Engineer Service and in this context the Tribunal held that the services are chargeable under In....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... names and price details not amounts to sale or promotion. The facts in the present case are very different. Here directory is given to the customer/user employees who are required to know the details of affiliates before using meal vouchers. Publication of directory is an important link in the overall activities of the assessee, which definitely helps in promoting the business of the affiliates. 15. Coming to the invocation of the extended period, we find that the main contention of the aseessee is that they have taken centralized registration in respect of outdoor catering service and while taking the said registration, in documents it was indicated that they are in the business of meal voucher. We are in full agreement with the Ld. A.R. that while granting the centralized registration for outdoor category service. Revenue is not expected to examine whether other activities are dutiable or classification of various services provided by them. In case of centralized registration, all that Revenue officials are expected is to know from the applicant whether he has proper centralized accounting system. We also note that even their registration was taken as late at Octo. 2004 while....