BUSINESS AUXILIARY SERVICE

Last updated: 20 September 2007

Court :
CESTAT, CHENNAI BENCH

Brief :
Section 65 of the Finance Act, 1994, read with section 35F of the Central Excise Act, 1944 - Business auxiliary service - Period from October, 2003 to February, 2005 - Whether where assessee was engaged in collecting payments on behalf of its clients, activity undertaken by assessee would get covered within scope of ‘any incidental or auxiliary support service’ under definition of ‘Business auxiliary service’ inasmuch as ‘collection or recovery of cheques’ is one of illustrations of ‘incidental or auxiliary support service’, given in statute and, therefore, assessee was to be directed to pre-deposit part of service tax demanded under category of ‘Business auxiliary service’ - Held, yes [Para 4] >> FACTS The assessee was engaged in the activity of collecting payments on behalf of the clients, like ICICI and LIC. The service tax was demanded from the assessee under the category of ‘Business auxiliary services’ and penalty was imposed upon it. The assessee filed application for waiver of pre-deposit and stay of recovery. The Commissioner (Appeals) passed interim order directing pre-deposit of Rs. 1.5 lakh under section 35F of the Central Excise Act, 1944; but as same was not deposited, the Commissioner (Appeals) dismissed the appeal for want of compliance with section 35F. In appeal, the assessee contended that same service had been categorized as ‘Recovery agent’s service’ by the department and, hence, it was not open to the department to treat the same as ‘Business auxiliary service’.

Citation :
Corporate Debt Management Services v. Commissioner of Central Excise & Service Tax, Coimbatore