2025 (7) TMI 347

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....ng service tax of Rs.6,02,040/- was issued. Upon adjudication, the Ld. Adjudicating Authority passed the Order-in-Original No.220/2012 dated 30.11.2012 (i) confirming the demand of service tax under Section 73 of the Finance Act, 1994 (ii) along with interest under Section 75 of the Act and (iii) imposing penalties under Section 77 & 78 of the Act ibid. Aggrieved by the order of the Adjudicating Authority, the Appellant filed appeal before the Commissioner (Appeals) inter alia contending that (i) the service of data processing provided by them to ACMPL was not liable to service tax since 'Information Technology Service' was excluded from the ambit of 'Business Auxiliary Service' ('BAS' for short) during relevant period, (ii) in respect of Rs.20,42,000/- received from RRD during 2007-08, their co-vendor M/s.Wintec IT Enabled Services Pvt. Ltd. ('Wintec' for short) have paid service tax and that (iii) no suppression could be alleged against them since the issue involves interpretation of law. They relied upon the decision of the Hon'ble Apex Court in CCE Vs Gandhi & Gandhi - 2011 (23) STR J94 (SC). Insofar as the Service tax of Rs.3,49,649/- for the year 2006-07 is concerned, Appella....

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....i.-Bang.) * Kalpataru Power Transmission Ltd. CCE & ST Ahmedabad - 2023 (69) GSTL 54 (Tri.-Ahmd.) * Syniverse Mobile Solutions Pvt. Ltd. v Commissioner of Customs, Central Excise and Service Tax, Hyderabad- 2023 (6) TMI 463 - CESTAT Hyderabad. 3.6 Without prejudice to the above, with effect from 01.05.2006, Data Processing Services are classifiable under 'Business Support Service' ('BSS', for short) under Section 65 (104c) of the Finance Act, 1994. Therefore, the classification adopted by the Department is erroneous. Reliance in this regard is placed on Gandhi and Gandhi Chartered Accountants Vs CCE Hyderabad - 2010 (7) S.T.R 25 (Tri.-Bang.) which was affirmed by the Hon'ble Supreme Court and the Board's clarification in D.O. F.No.334/4/2006-TRU dated 28.02.2006. On this ground of erroneous classification of service also, the impugned order merits to be set aside. 3.7 Regarding the 2nd issue, Ms. Nimrah Ali submitted that the Appellant and Wintec entered into an MUA to jointly provide services to ACMPL/RRD on cost sharing basis and accordingly, both the parties provided the service and discharged service tax on the respective portions of consideration attrib....

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....appropriate to refer to Section 65 (19) of the Act ibid which defines 'Business Auxiliary Service'. The definition of the service, as amended by the Finance Act, 2004 and Finance Act, 2005 reads as under : "65 (19) 'business auxiliary service' means any service in relation to,- i. promotion or marketing or sale of goods produced or provided by 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. procurement of goods and service, which are inputs for the client; Explanation - For removal of doubts, it is hereby declared that for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client; v. production or processing of goods for, or 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 clause (i) to (vi), such as billing,, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or de....

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....sing charges for the period from May 2006 to March 2007 but have not paid their service tax on such receipts". However, the impugned order does not state as to how these services are taxable under 'BAS' and, in any case, no Service Tax could be levied on mere collection/receipt when such receipt remains outside the scope of service. 9. A perusal of records reveals that the activities undertaken by the Appellant are not covered under any of the categories under the definition of "Business Auxiliary Services" such as - a) promotion or marketing or sale of goods produced or provided by or belonging to the client; b) promotion or marketing of service provided by the client; c) customer care service provided on behalf of the client; d) procurement of goods and service, which are inputs for the client; e) production or processing of goods for, or on behalf of, the client; or f) provision of service on behalf of the client; or g) any service incidental or auxiliary to any activity specified above. and even the Revenue has not been able to identify as to under which of the above clause, the activity of the Appellant gets ....