CA Urvashi Porwal
Brief of the Case
In the case of M/s. Raja Charity Trust Vs. CCE. Tirunelveli, it was held that the activity of procuring orders for the principal and also exploring potential customers and channelized the purchase orders should be classified under “Business Auxiliary Service” (BAS) in accordance with the rules of classification of the service.
Facts of the Case
The appellant entered into agreement for procuring orders for the principal and also exploring potential customers and channelized the purchase orders. Such was the principal activity of the appellant. But Revenue alleged in the SCN that the appellant provided “Clearing and Forwarding agent” service.
Contentions of the Assessee
The assessee explained that concept of taxing agent’s service has been incorporated into the statute book under the taxing entry “Business Auxiliary Service” (BAS) w.e.f. 01.07.2003. It is further submitted that during the period 1.07.2003 to 8.7.2004, the service provided by an agent was not taxable by virtue of exemption granted in terms of Notification No. 13/2003-ST dated 20.06.2003.
On the aforesaid legal premises with the factual ground, the prayer of the appellant is to bring the activities carried out by it under the scope of “Business Auxiliary Service” read with exemption notification to grant immunity to the appellant from taxation under that had setting aside the impugned order.
Contentions of the Revenue
On the other hand, Revenue submitted that following the classification rule, the appellant has been brought under the scope of “Clearing and Forwarding Agency” service and appropriate levy has been made by the adjudications.
Held by Hon’ble CESTAT
The Hon’ble CESTAT stated that Law is well settled that the scope of taxing entry is to be strictly construed and there is no intendment about tax. The facts and circumstances of the case warrant to bring the activity carried out by the appellant as per agreement to the scope of “Business Auxiliary Service” (BAS). This satisfies the principle of classification laid down in Section 66 of the Finance Act, 1994, excludes the other category of classification claimed by Revenue for the reason that the taxing entry most specifically attracts an activity shall bring that service into the same class and no other class by any remote construction. Thus, the appellant’s activity shall fall under the taxing entry of BAS without being taxable under the category of C & F Agents service.
In view of the reasons stated above, appellant succeed and the appeal is allowed.
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