SOLAIMALAI COMMUNIQUE Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appeal is against demand of Service Tax of Rs. 1,73,037/ - on Business Auxiliary Service for the period July, 2003 to March, 2004. After examining the records, we note that, under an agreement dated 1 -10 -2002 with M/s. ESPN Software India Pvt. Ltd., the appellants were rendering what was called "ESS services" on behalf of the above company to cable operators during the above period. The lower authorities classified the said services as "Business Auxiliary Service" as defined under Section 65 of the Finance Act, 1994 and accordingly demanded the above tax on the value of consideration collected by the assessee from their customer. Before the original authority, the assessee did not claim any exemption from payment of tax. But, before the first appellate authority, they claimed such exemption under Clause (c) of Notification No. 25/2004 -S.T., dated 10 -9 -2004, which had exempted the value of Business Auxiliary Service from payment of tax for the period prior to 10 -9 -2004. This claim was rejected by learned Commissioner (Appeals). In the present appeal, the assessee has abandoned the above claim and has claimed the benefit of Clause (d)(iii) of the Notification. In support of this belated claim, learned Counsel has relied on the Apex Court's judgment in National Thermal Power Co. Ltd. v. Commissioner of Income -Tax 1998 (99) E.L.T. 200 (S.C.), wherein the Tribunal was held to have jurisdiction to examine a question of law which had not been raised before lower authorities. Reliance has also been placed on the apex court's judgment in Share Medical Care v. Union of Indi, wherein it was held that the assessee, who had not claimed the benefit of exemption Notification initially, was not barred, prohibited or estopped from claiming such a benefit at a later stage. We have heard learned SDR also.

(2.) AFTER considering the submissions, we are of the view that, in view of the case law cited by counsel, the assessee's claim for exemption under Clause (d)(iii) of the above Notification needs to be examined by the original authority in accordance with law.

(3.) ACCORDINGLY , after setting aside the orders of the lower authorities, we allow this appeal by way of remand directing the original authority to consider the above claim of the assessee and take a decision thereon after giving them a reasonable opportunity of being heard. (Dictated and pronounced in open Court)