BSR ENTERPRISES Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) AFTER examining the records and hearing both sides, we note that the Commissioner has demanded differential service tax and education cess totalling to Rs. 56,35,273/ - from the appellants by invoking the larger period of limitation under Section 73(1) of the Finance Act, 1994 and has also imposed penalties on them under Sections 76 and 78 of the said Act. The demand is for the period July, 2003 to March, 2007 and the same comprise three categories of taxable service viz. (i) Business Auxiliary Service; (ii) Maintenance and Repair Service; and (iii) Commissioning and Installation Service. In all these three categories, the appellants had got themselves registered with the department. During the period of dispute, they had undertaken sales of air conditioner on behalf of their principal (M/s. Carrier Aircon) on commission basis. They had also undertaken maintenance and repairs of air conditioners. They had also done installation and commissioning of the air conditioners which were sold on behalf of the principal. The second and third category of taxable service was introduced on 01.07.2003 and the first category was introduced on 10.09.2004. It further appears from the records that, in respect of commission received by a commission agent engaged in the sale of goods supplied by principal, there was exemption upto 10.09.2004 under Notification No. 13/03 -ST. Under another Notification No. 12/03 -ST dated 20.06.2003, the Central Government had granted exemption from payment of service tax on goods and materials sold by a service provider in the course of providing the second and third categories of taxable service. Yet another Notification cited by the learned Counsel today is No. 19/03 -ST, which granted rebate to the extent of 67% of the gross taxable value in respect of the third category of service, but this benefit was not claimed by the party at any stage.

(2.) IT is submitted by learned Counsel that, on account of denial of the benefit of Notification No. 13/03 -ST, differential service tax of Rs. 3,45,822/ - has been demanded from the appellants in respect of the commission received by them during the period July, 2003 to August, 2004. It is also submitted that the differential demand of service tax of Rs. 42,82,502/ - is on account of denial of the benefit of Notification No. 12/03 -ST, whereunder no service tax was payable on the value of goods and materials sold in the course of rendering of Maintenance and Repairs Service and Installation and Commissioning Services. According to learned Counsel, the benefit of the aforesaid Notifications was denied on untenable grounds. We have heard the learned SDR also, who has reiterated the findings of the Commissioner.

(3.) AFTER considering the submissions, we have found prima facie case for the appellants. Apparently, the benefit of Notifications 12/03 -ST and 13/03 -ST was admissible to the assessee. It is also borne on record that service tax to the extent of Rs. 10,06,949/ - in the second category (Maintenance and Repairs Service) was paid by M/s. Carrier Aircon. Though this fact was taken to the notice of the Commissioner, its benefit was not given by the Commissioner. Having found prima facie case for the appellants, we order waiver of predeposit and stay of recovery in respect of the amounts of service tax and penalties. (Dictated and pronounced in open court)