Service Tax under Market Research Agency Service.

PJ/CASE LAW/2015-16/2968

Case:-METAL DEVELOPMENT CO. Versus COMMISSIONER OF C.EX. & S.T., MUMBAI

Citation:-2015 (40) S.T.R. 545 (Tri. - Mumbai)

Brief Facts:-Brief facts of the case are that a Show Cause Notice was issued to the appellant demanding Service Tax of Rs. 45,000/- on the ground that the appellant is engaged in conducting marketing research in relation to steel products. Hence providing market research agency service. The adjudicating authority confirmed the demand with interest and also imposed penalties. The appellant filed appeal against the adjudication order and the Commissioner (Appeals) dismissed the appeal.
On the last date of hearing, Mr. Uday Telang, Proprietor of the appellant appeared in person and the Bench directed the appellant to produce evidence in respect of compensation received from M/s. Kalyani Carpenter Special Steels Ltd., Pune. In pursuance to the direction the appellant produced a copy of the bank voucher issued by M/s. Kalyani Carpenter whereby the payments were made to the appellant.

Appellant’s Contention:-The appellant submitted that being an IIT Engineer, M/s. Kalyani Carpenter engaged him for consultancy in respect of metal development and payments were made as professional fee in respect of metal development as per the document now produced.The appellant also submitted that in reply to the Show Cause Notice, the appellant specifically mentioned that his job was of an industrial sales man and he carries brochures of the company to various prospective buyers, gave the information about products and facilities available and requested them to try out company’s product. In view of this, the contention is that the appellant had not provided any market research agency service.

Respondent’s Contention-Revenue relies upon the finding of the lower authority and submitted that as the appellant has provided taxable service of market research agency service. Hence the demand is rightly made.

Reasoning of judgment:-In reply to the Show Cause Notice the appellant specifically gave details of his activities which is not in respect of market research agency service. The payment made by M/s. Kalyani Carpenter also in respect of professional fee in respect of metal development. In view of this, they find merit in the contention of the appellant that the appellant had not provided any taxable service in respect of market research agency. Hence the impugned order is set aside and the appeal is allowed.

Decision:- The appeal is allowed.

Comment:- The crux of the case is that Market Research Agency Service was a taxable service under positive list and Revenue contented that appellant has provided Market Research Agency Service. Therefore service was taxable according to the Revenue. The Hon’ble Tribunal has accepted the contention of appellant that the appellant has not provided any taxable service in respect of market research agency as consultancy and professional services rendered by a IIT Engineer for metal development is not covered under Market research agency. Therefore appeal of assessee has been allowed.

Submitted By:- Somya Jain

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PJ/CASE LAW/2015-16/2968

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