TaxTMI 
TaxTMI 
2008 (10) TMI 111
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed 28-3-2006 -do- 5. ST/188/2006 OIA No. 75/2006-S.T. dated 28-3-2006 -do- 6. ST/189/2006 OIA No. 76/2006-S.T. dated 28-3-2006 -do- 7. ST/190/2006 OIA No. 77/2006-S.T. dated 28-3-2006 -do- 8. ST/260/2006 OIA No. 3/2006-S.T. dated 31-5-2006 The Commissioner of Central Excise (Appeals), Thiruvananthapuram. 9. ST/268/2006 OIA No. 5/2006-S.T. dated 31-5-2006 -do- 10. ST/269/2006 OIA No. 4/2006-S.T., dated 31-5-2006 -do- 3. The issue decided by the Commissioner (A) is about the assessee having brought under the category of "Business Auxiliary Services". The appellants were collecting telephone bills on behalf of BSNL and the department proceeded to levy Service tax on them on the ground that such activity should be brought under the category of "Business Auxiliary Services". The appellant's submission is that they are carrying on the activity of "Banking and Other Financial Services". They submitted that the activity carried out by them is "Cash Management Service" which is exempted under "Banking and Other Financial Services" and hence,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eived, mode of collection such as cash/cheques/Demand Draft etc. with initials of the collecting official. They should stamp similar details on the counterfoil of the telephone bills retained by them. They should send the returned cheques, if any, to the Accounts Officer (TR) or Accounts Officer authorised to receive all the lists etc. along with a schedule thereof. The appellant's contention is that their activity comes under normal banking service provided to the client and they are not providing any service to the customer of the client but the service is rendered to the clients. The above contention is untenable as telephone subscribers are customers of BSNL and the appellant is, rendering service to these customers by collecting the bills. That service is on behalf of BSNL and it relates to customer care. Thus all the conditions for invoking the provisions of clause (iii), (vi) and (vii) of clause (19) of Section 65 of Finance Act, 1994 have been satisfied. The appellants contend that the sub-clauses (i) and (ii) of Section 65(19) would give an insight into the scope of the expression 'customer care service' and the same should relate to an activity of promotion or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e. The customers of BSNL are merely depositing the amount due to the BSNL into the BSNL ac count i.e. the appellant being a banking industry are giving the facility to the customer who is having their account to enable their customers to de posit the amounts due to them. It does not come under the 'business auxiliary services'. The category 'business auxiliary services' excludes cash management. They submit that the activity is in the nature of cash management. It is excluded under 'banking and other financial services'. Therefore their contention is that their activity of giving facility to their client to allow the operation of the account, inasmuch as their client is only permitted to allow their customers to deposit the amounts into their accounts is within the banking activity. Such activity is not covered under the category of 'customer care service' within the category of 'business auxiliary service". 4. I have heard both sides in the matter. Learned Cost Accountant appearing for the appellants took me through the records and the definition of 'business auxiliary services' and that of 'banking and financial services'. He....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant was providing software and hardware for revenue management system for electricity supply concern. The matter was examined and held that billing or other activities relating to information technology service was excluded from business auxiliary service. The matter was remanded for recomputation of service tax liability by excluding the amounts charged for hardware and information technology service. The facts are distinguishable and not applicable to the present case. In the case of Corporate Debt Management Services (supra), the appellants were recovery agents and were collecting and recovering cheques and that was held to be coming within the category of 'any incidental or auxiliary support service' under 'business auxiliary service'. The activity carried out by the appellants was that of business auxiliary service and therefore it was rightly covered. The facts are distinguishable with the present case. In the case of Focussed Corporate Services (I) Pvt. Ltd. (supra) the appellants were carrying on the activity of marketing of loans and credit cards which was a business auxiliary activity as marketing and sales was being done and hence this activity is di....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oking provided by a foreign exchange broker other than those covered under sub-clause (a); As can be seen from the definition of 'business auxiliary service', as extracted above, the activity has to be that of promotion or marketing or sales of goods produced or provided by or belonging to the client. The other categories, akin to the same activity is defined under italic (i) to italic (vi). Reference to services incidental or auxiliary to any of the activities specified in italic (vii). Basic activity should be that of promoting or marketing of sale of goods produced and in that connection if the activity of billing, issue of collection or recovery of cheques, payments, maintenance of accounts and remittances etc., are done then they come within the main category of business auxiliary services. I am required to see as to whether the appellants at all are carrying on the activity of promotion, marketing or sale of goods produced and any activity incidental or auxiliary to the activities mentioned under 'business auxiliary service'. 7. On a careful consideration I find that appellants have permitted their client BSNL to allow their customers to deposit the bill....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion centres would have facilities and trained employees for drawal of blood samples, will carry out the essential processing (serum separation) of blood and forward the samples to the principals through couriers. The collection centres are also responsible for the disposal of waste arising in the process. The test charges are collected by these Centres at the rates stipulated by the test laboratories. The collection centres are paid a percentage (25% etc.) for the service rendered by them. 2. Under the impugned orders, it has been found that the services rendered by these collection centres are "Business Auxiliary Services" which attract service tax. Tax demands remain confirmed on that basis. The orders rejected the contention of the appellants that their services were actually "Technical Testing and Analysis Service" or part of those services and remain excluded from the levy under the relevant heading. 3. We have heard the learned counsel for the appellants and learned SDR and have perused records. 4. As already noted, the dispute is whether the service rendered by the collection centres is Business Auxiliary Service or Technical Test and Analysis' services. We may ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e subjected to tax under another heading (Business Auxiliary Service) simply because that service remains excluded from levy under the relevant heading. It is being pointed out that such an approach would be contrary to the legislative scheme. 7. Supplementing the legal position canvassed on behalf of the collection centre for Dr. Lal Path Labs. Pvt. Ltd., the learned counsel for the collection centre of Speciality Ranbaxy Ltd. would contend that even if drawal of blood sample did not form part of "technical testing and analysis service", no levy would be attracted in view of the expended scope conferred on that service through its-definition under he statute. His emphasis is that "technical testing end analysis service" would cover not only the services strictly and narrowly falling within the ambit of those services; but also "any service in relation to" those services in view of the definition. It is being contended that services that are ancillary or auxiliary or connected to the specified services (technical testing and analysis) would also fall within the scope of the specified services in view of the broad sweep of the language used in the definition. The submission of th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....#39; technical testing and analysis service are also excluded from the service tax, the contention of the learned SDR is that the service should form part of technical testing and service to be in relation to that service. It is his contention that since drawing of sample has no connection with test per Se, it cannot be treated as "in connection with" the test. 11. There is no dispute that testing and analysis carried out in the specialised laboratories constitute "technical testing and analysis service" contemplated under the law. Those laboratories are also not subjected to, including in relation to drawing of blood samples, service tax, treating those tests and analysis as relating to human beings. The services rendered by the appellants-drawing, processing and forwarding of samples-is integral to the testing of those samples. As already noted, one of the impugned orders has also noted that the drawing of test samples may form part of test and analysis. All the same, they are being subjected to tax on the plea that those services are separate from the scope of testing and analysis service and are taxable as business auxiliary service. This approach is hard to understand. Ther....