G. KARUNAKAR REDDY Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) VIDE the impugned order, the Commissioner (Appeals) affirmed the demand of Rs. 2,64,229/ - and Rs. 1,70,154/ - confirmed against the appellants for the years 2005 -06 and 2006 -07 respectively found due from them towards business auxiliary service' rendered by them. The impugned order also affirmed applicable interest on the above demands and penalty equal to twice the amounts demanded in terms of Section 78 of the Finance Act, 1994.

(2.) FACTS of the case are that the appellants leased out buses to Andhra Pradesh State Road Transport Corporation (APSRTC) for transporting passengers under a contract. As per the contract, the appellant would be supplying the buses along with driver, who doubled also as a conductor when required. After due process of law, the original authority demanded service tax from the appellants finding that it had rendered 'business auxiliary service' of Section 65(19)(vi) of the Act. This entry provides for taxing of 'provision of service on behalf of the client'.

(3.) ON a careful perusal of the records and after considering the submissions by both sides, we find that the activity involved prima facie, supply of tangible goods which became taxable after period of dispute. Moreover, the appellants had not apparently provided any service on behalf of APSRTC by leasing out buses to it under a contract. In the circumstances, we order waiver of pre -deposit of the dues adjudged against the appellants and stay recovery thereof pending decision in the appeal.