TaxTMI 
TaxTMI 
2016 (4) TMI 496
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent dated 8 November, 1982. It is the case of the revenue that the recovery of such expenses is in the nature of services rendered under the category of Business Auxiliary Services (promotion or marketing or sale of goods produced are belonging to the client). A show cause notice was issued for demand of the service tax liability, interest thereof and for imposition of penalties. Appellant contested the issue on merits as well as on limitation. After following the due process of law, the adjudicating authority confirmed the demand raised with interest and also imposed penalties. He also appropriated an amount paid by the appellant during the material period. 3. Learned Advocate appearing on behalf of the appellant draws our attention to the facts of the case. He takes us through the show cause notice, reply made and the impugned order. It is his submission that the agreement entered by the appellant with their group companies has to be seen to come to an appropriate conclusion. He takes us through the various clauses of the agreement dated 8 November, 1982; he would submit that the infrastructure facility of Marketing Pharmaceutical being available with the appellant, they shared ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s case is regarding the taxability of the services rendered by the appellant. It is the case of the revenue that such services would fall under the category of Business Auxiliary Services while the appellant is resisting the same. 6.1. Undisputed facts are appellant is manufacturer of pharmaceutical products and also has a good network of marketing his own product; the said marketing network is being utilized by the group companies for marketing of pharmaceutical products. It is also undisputed that the three companies whose products are marketed by the appellants employees are sent on deputation to group companies. 6.2. On such a factual matrix we need to consider the definition of Business Auxiliary Services which reads as under. "2.16. "Business Auxiliary Services" as provided in Section 65, Sub Clause 19 of the Finance Act, 1994 is as under: "Business Auxiliary Services" means any service in relation to- (i) Promotion or Marketing or Sale of goods Produced or provided 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)....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 6.4. We find that similar issue cropped up before the bench in the case of K.Raheja Real Estate Services Pvt. Ltd. (supra) therein the bench after considering the entire issue held as under. "6. We have carefully considered the submissions and perused the record. Undisputedly the appellant stated paying service tax with effect from May 2006 under Business Support Services. Vide the impugned order, the learned Commissioner has appropriated the amount of service tax paid by the appellant under Business Support Services, whereas he classified, the service under the Business Auxiliary Services. We find that the learned Commissioner dwell on the basis that the service is classifiable under the Business Auxiliary Services without giving any findings why the service is not classifiable under Business Support Services under which the appellant were registered, paying the service tax and were filing ST3 Returns. Thereafter proceeded to decide the valuation aspect. We also find that learned Commissioner has not given any findings on the submissions made by the appellant. On the aspect of classification thus the order passed by the learned Commissioner is not a speaking order. 6.1. As per ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hus: "Joint Employment 5. There can also be cases where staff is employed by one or more employers who normally share the cost of such employment. The services provided by such employee will be covered by the exclusion provided in the definition of service. However, if the staff has been engaged by one employer and only made available to other for a consideration, it shall not be a case of joint employment. 6. Another arrangement could be where one entity pays the salary and other expenses of the staff on behalf of other joint employers which are later trcouped from the other employers on an agreed basis on actual. Such recoveries will not be liable to service tax as it is merely a case of cost reimbursement." 7.1. We find that in the present case, the revenue would have had no objection if the contract of employment with the employees had been signed jointly by all the employer-companies, and if these employer-companies were paying their respective share of salary to the employees directly. The problem in the present case has arisen only because instead of the employer companies signing the appointment letter jointly, only one of them has signed the same and then shown the emp....