M/s Arti Adhvariya & Co. Vs C.S.T. (CESTAT Ahmedabad)
We find that there is no dispute that the appellant is an individual NRI in USA. During the relevant period this Tribunal has given various judgments wherein it was held that an individual and / or proprietorship concern is not considered as a commcerial concern, therefore, the service tax under BAS is not payable by such individual.
Since definition of commercial concern which have taken effect from 1-5-2006 wherein the word ‘commercial concern’ has been substituted by “any person”. Therefore intention of the legislature is clear that prior to 1-5-2006, the services provided by an individual was not to be treated as service provided by commercial concern.
It has been decided that an individual or a proprietor or a proprietorship concern cannot be charged service tax under BAS. Considering the above position of law, we set aside the impugned order and allow the appeal. Since the appeal is allowed on the above discussed ground, we do not address other issues raised by the assesse.
FULL TEXT OF THE CESTAT JUDGEMENT
The brief facts of the case are that the appellant is a Non-Resident Indian providing service of Commission Agent to Indian Service Recipient i.e. Amway Enterprise in USA. The service tax demand was confirmed against the appellant. The following issues arise from the impugned order.
1. Whether appellant being NRI agent liable to pay service tax or recipient of service is liable for the service tax.
2. Whether demand of service tax under the BAS is sustainable or not.
3. Whether appellant as an Individual provided a service to a client can be termed as commercial concern or not.
4. Whether appellant is eligible for the SSI exemption vide notifn. No. 5/2005 w.e.f. 01.04.2005 or not.
5. When appellant had interpretation difference and classification dispute, whether extended period can be invokable or not.
6. Whether penalty can be imposable or not.
2. Sh. Vipul Kandhar, Ld. C.A. appearing on behalf of the appellant submits that the appellant is an NRI and staying in USA and he does not have office or establishment in India. He provided services of Commission Agent for marketing of goods of Amway Enterprise India in USA. As per Section 66A in such case the service tax liability is on Amway Enterprise who have discharged the service tax liability on this service. He further submits that the demand of service tax was raised under BAS, the appellant being an individual proprietorship concern not considered as commercial concern, hence, he is not liable to pay service tax. In this regard he placed reliance on the following judgment.
