TaxTMI 
TaxTMI 
2022 (10) TMI 881
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....in other higher classes and charges thereof collected by appellant from railways, will fall under the mischief of "Customer Care Service" provided to the railways as taxable under "Business Auxiliary service". 6.4 No definition of "Customer Care" has been given in Section 65(19) or for that matter anywhere else in the Finance Act, 1994. as per the Oxford Dictionary, "Customer Care' is defined as "assistance and support provided by a company to those people who buy or use its products or services". Customer Care service is also often explained as "provision of service to customers, before, during and after a purchase", as the process of looking after customers to best ensure their satisfaction with the business and its goods and services. The underlining motive to provide customer care services is the desire to maintain ongoing client relationship and loyalty. The railways provide bed rolls to the upper class passengers who undisputedly have to shell out considerable more ticket price as compared to second class passengers, to ensure their comfort, as a customer initiative. In our view, the appellant when performing its activities and providing these services of supply of bed ....
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....wth and development by being safe, financially viable, environment-friendly and caring for its customers and employees. (emphasis supplied) The vision and Mission Statements thus indicate that Railways are inter alia, customer focused and to care for customers who are none other than their passengers. The supply of bed rolls to upper class passengers is one such endeavour of the railways to provide customer care to tis passengers. 6.7 Viewed in this light the Railways are indubitably the "client" of the appellant since they perform the said customer care service on behalf of the railways. In the event, the activities carried out by the appellant will definitely come within Section 65(105) (zzzq) read with Section 65 (104c) of the Finance Act, 1994. In the Doon's caterers case, the appeal was allowed because even though the proceedings sought to demand service liability from the appellants therein under Support Services, the commissioner (Appeals) went beyond the scope of SCN and held the services as falling under BAS. 6.10 On the other hand, as found by the Tribunal in he case of RC Goel Vs CCE New Delhi [2017(5) GSTL 324 (Tri.Del.)] also relied upon the appellant, althou....
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....at the passengers travelling in Railways having no privity of contract, the service provided by the appellant has to be construed as service provided by the railways and therefore, in terms of Section 99 of the Finance Act, 2013 as extracted above, the appellant cannot be saddled with tax liability for the period mentioned above. In these appeals, the appellant has raised the following substantial questions of law. a. Whether the Railways be termed as "clients" in the transaction of supply of bed rolls to the passengers travelling in AC Coaches by the appellant? b. Whether in the absence of the definition of "Service" prior to 1-7-2012 in the finance Act and even after insertion of the definition of "Service" under Section 66 B (44) of the Finance Act effect from 1-7-2023, the supply of any goods where the ownership is not transferred, amounts to "deemed sale' and outside the purview of the Finance Act? c. Whether the supply of bed rolls by the appellant can be brought under the purview of Finance Act prior to 1-7- 2012, especially when by virtue of insertion of Section 66D(o) effective only from 1-7-2012 that the transport of passengers travelling in upper classes of rai....
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....vices, which are inputs for the client; or (v) production of goods 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 information technology service and any activity that amounts to "manufacture" within the meaning of clause (f) of section 2 of the central excise Act, 1944(1 of 1944)" 10. The appellant was liable to pay tax, as the service provided by the appellant squarely falls within the ambit of Clause (iii) of section 65(19) of Finance Act, 1994, which reads as under: (iii) any customer care service provided on behalf of the client. 11. For the period after 01.07.2012, the service provided by the appellant fall within the definition of 'service' as under Section 65(b)(44) of the Finance Act 1994 w.e.f. 01.07.2012, which reads....
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.... subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject, but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction......" 13. This view has been followed repeatedly by the Hon'ble Supreme Court and recently in Commissioner of Customs (Import), Mumbai Vs. Dilip Kumar & Company, the law has been summarised by the Hon'ble Supreme Court as follows: "(1) Exemption notification should b interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case is not correct and all the decisions which took similar view as in Sun Export Case stands over-ruled." 14. Once the language in taxing st....