By TIOL News Service

MUMBAI, OCT 13, 2014: THE applicants are engaged in providing smart card based driving licence and paper based learning licence on behalf of Government of Maharashtra.

It is the Revenue view that the activity is chargeable to Service Tax under the category of Business Auxiliary Service/Business Support in terms of section 65(19) clause (vi) of the Finance Act, 1994.

Periodical show-cause notices for November 2006 to March 2012 were issued and the demands came to be confirmed against the applicant in March, 2014 by the Commissioner of Service Tax, Mumbai.

Before the CESTAT, the applicant submitted that the activity conducted by the applicant is a statutory function of the Government of Maharashtra and is not in relation to any business activity. Therefore, same does not qualify under the category of Business Auxiliary Service/Business Support Service. Inasmuch as since the demands are not sustainable, the applicant seeks waiver of pre-deposit.

The Bench observed -

++ As issuance of the driving licence by the applicant on behalf of the Government of Maharashtra prima facie is not an activity of business, therefore, the same does not qualify under Business Auxiliary Service/Business Support Service. In these circumstances, the applicants have made out a case for complete waiver of pre-deposit.

In fine, the CESTAT waived the requirement of pre-deposit of entire amount of service tax, interest and penalty and stayed recovery during the pendency of the appeals.

In passing: Also see 2008-TIOL-1726-CESTAT-DEL which laid down the yardstick years ago!

(See 2014-TIOL-1989-CESTAT-MUM)