2017 (3) TMI 1159

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.... of Central Excise (Adjudication), New Delhi. The appellant/assessee has filed appeal contesting the service tax liability confirmed in the impugned order. The Revenue filed an appeal contesting the findings of the Original Authority on dropping of demand for extended period and not imposing penalty under Section 78 of the Finance Act, 1994. The appellant/assessee are engaged in providing bill printing service to telecom companies. The Revenue entertained a view that such activities are taxable under the category of Business Auxiliary Service in terms of Section 65 (19) of the Act. The Original Authority concluded that the appellant/ assessee are liable to service tax for normal period of one year from relevant date. He imposed penalties un....

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....ting, z-folding, stapling, pin code wise bundling, stuffing into window cover and bundling in convenient numbers. The printing operation and post printing operations are to be completed within the time schedule prescribed in the agreement. The number of print operations executed should be system controlled and the same will be required for payment of charges to the appellant/assessee. 3. We have carefully perused the terms of contract and also the statutory definition of Business Auxiliary Service. The impugned order held that the appellant/assessee were undertaking "billing" service and, as such, are liable to service tax under BAS. The statutory definition relevant is as below :- Section 65 (19) :- "business auxiliary service"....

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....includes services as a commissions agent, but does not include any activity that amounts to "manufacture" within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944". 4. We note that sub-clause (vii) contains the entry which is applied in the present case. "A service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing ........." is the entry under which the appellant/assessee was sought to be taxed. The Original Authority recorded that as the term "billing" is not defined in the Finance Act, 1994, common parlance is to be applied. He concluded that printing the statement of account or of money due for goods or services, and post printing function of dispatching the bill would q....

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....ecom companies. We find such activity cannot be considered as business auxiliary service. The operations are in terms of agreement on a principal to principal basis with no involvement of third party, namely user of telecom service. One more point to note is, that sub-clause (vii) talks about incidental or auxiliary service to any one of the activity in sub-clauses (i) to (vi). These sub-clauses talk about promotion or marketing of service provided by the client or customer care service provided on behalf of the client, provision of service on behalf of the client. We note that the appellant/assessee is nowhere connected with promotion of service or provision of service on behalf of the telecom companies. 5. The learned Counsel for the a....