Page 163 - GSTL_2nd July 2020 _Vol 38_Part 1

2020 ] NIRAJ PRASAD v. COMMISSIONER OF C. EX. & S.T., KANPUR 81
2. In all public records and in its relationship with other persons,
on letterheads and business forms, the Licensee shall indicate
its independent ownership of the said business and that it is a
Licensee.
4. However, a show cause notice dated 17 March, 2011 was issued to
the appellant imposing a demand of Service Tax on the 75% amount of the appel-
lant under the category of “business auxiliary service” under Section 65(105)(zzb)
of the Finance Act, 1994 (The Act) on the ground that the appellant is providing
the said service to Career Launcher.
5. A detailed reply was filed by the appellant to the aforesaid show
cause notice mentioning therein that there is no element of service in the ar-
rangement between the appellant and Career Launcher and so no “business aux-
iliary service” is provided by the appellant and even otherwise, if “business aux-
iliary service”, was being rendered, the appellant would be entitled to claim ex-
emption under Notification No. 14 of 2004, dated 10 September, 2004. It was fur-
ther stated in the reply to the show cause notice that any demand of Service Tax
under “business auxiliary service” would result in double taxation as Career
Launcher had paid Service Tax on the entire amount that was deposited by the
appellant.
6. The reply filed by the appellant did not find favour of the adjudicat-
ing authority and the demand was confirmed. The relevant portion of the order
is reproduced below :-
“Thus, in the present case, it can indisputably be concluded that M/s.
Career Launcher (Licensor) has engaged the Shri Niraj Prasad, a profes-
sional, in the capacity of “Service Provider”, for supporting their commer-
cial activities (CTC Services) and in carrying out all works relating to provi-
sions of services on their behalf and promotion & marketing for branded
CTC services, which otherwise were required to be carried out by M/s. Ca-
reer Launcher themselves and in return to said services, the party got paid,
which clearly establishes a client and service provider relationship between
M/s. Career Launcher and Shri Niraj Prasad. All the three prerequisites for
covering the services under Service Tax namely, event of provision of taxa-
ble service, presence of service provider and service recipient and the act of
rendering taxable service against some consideration/charge/commission/
remuneration/value are present in the instant case and therefore consider-
ing the nature of services being performed by the party in this case, as spelt
out in the agreement, there remains no iota of doubt that the party was act-
ing on behalf of M/s. Career Launcher, and thus the activities undertaken
by the party were squarely covered under clause (vi) of the definition of
Business Auxiliary Service, and the Service Tax is leviable under Section
65(105)(zzb) of the Act in the said category.
Further, I also fail to find any force in the plea taken by the party that
the CTC services were provided by them jointly and Service Tax on the said
services was being paid by M/s. Career Launcher at Delhi inasmuch as the
same is contrary to the spirit of the statutory provisions of the Finance Act,
1994, because both M/s. Career Launcher and Shri Niraj Prasad are two dif-
ferent business entities engaged in providing two different services under
the same service agreement. Shri Niraj Prasad is providing services on be-
half of M/s. CL hence, the activities, role and responsibilities of Shri Niraj
GST LAW TIMES  2nd July 2020  163