The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that customer care service is classifiable under “Business Auxiliary Services” u/s 65(11) of Finance Act 1994
The appellant is engaged in the business of providing catering service and supply of Bedroll kits in various Train of Indian Railway as per the contracts provided by IRCTC, thereby providing “Outdoor Catering Services” and “Business Auxiliary Service”. It was found that the appellant had been providing services of supply of bedroll kits to the passengers of train on behalf of IRCTC and not paid the service tax. On finding the evasion of tax the respondent issued a Show cause notice proposing a service tax of Rs. 55,47,317/- under the category of Outdoor Catering Service and Service tax amount of Rs.42,20,893/- under the category of Business Auxiliary Service.
The adjudicating authority after considering the submissions made by the appellant dropped the demand related to the catering service and confirmed the demand for the supply of bedroll kits under the category of Business Auxiliary Service along with interest and penalties.
It was contended by the appellant that the commissioner has erred in confirming the demand for bedroll kits considering the same as taxable service under the category of Business Auxiliary Service. IRCTC is a Govt. of India Enterprises and the service tax is not applicable on work providing bedrolls as “customer care service‟ under the category of “Business Auxiliary Service” within the meaning of Section 65(19) of the Act. It was independent work and has not been included as a taxable service in the Act.
The respondent contended that the supply of bedroll kits amounts to supplying services to IRCTC and the same is chargeable to service tax under the head of business auxiliary services. The appellant raised a monthly bill for each bedroll kit provided.
It was observed that Appellant has supplied bedroll kits to passengers of the Air-Conditioned class and other classes on behalf of IRCTC. As per the contract with IRCTC, the Appellant provide the bedroll kit to passengers on demand and the appellant did not charge the passengers. The services rendered by Appellant on behalf of IRCTC to passengers are in the nature of a “customer care service‟. The Tribunal viewed, such services appropriately classifiable under business auxiliary services under the category of “Customer care services” provided on behalf of the client under Section 65(11) of the Finance Act, 1994”.
The Tribunal consists of Member Judicial Mr Ramesh Nair and Member Technical, Mr P Anjani Kumar set aside the impugned order and the matter is remanded to the adjudicating authority to pass a fresh order, after following the Principle of Natural Justice by granting sufficient Personal hearing. Shri Nilesh V Suchak appeared for the Appellant and Shri J.A Patel for the Respondent.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
