2019 (3) TMI 1639 - AT - Service Tax

Business auxiliary services - providing table space to the financial institution, who sell their loan product to the customer of the vehicle sold by the appellant - demand of service tax - extended period of limitation - HELD THAT - Considering the Larger Bench decision in M/S PAGARIYA AUTO CENTER VERSUS CCE, AURANGABAD 2014 (2) TMI 98 - CESTAT NEW DELHI (LB) , which decided the issue that amount received as commission from the bank of financial institution for the sale of the loan is liable for service tax - demand sustained for normal period. Extended period of limitation - HELD THAT - The Hon ble Gujarat High Court in the case of COMMISSIONER OF C. EX., CUS. ST., VAPI VERSUS CHARAK PHARMA P. LTD. 2012 (11) TMI 475 - GUJARAT HIGH COURT also held that when the matter was referred to Larger Bench, extended period cannot be invoked. The impugned order is set aside to the extent of demand for the extended period - appeal allowed in part.

Summary

Issues Involved:
Whether the appellant is liable to pay service tax under Business Auxiliary services for providing table space to a financial institution selling loan products to customers of vehicles sold by the appellant.

Analysis:
The appellant contended that while they accepted the merit of a previous LB judgment, they argued against the confirmation of the demand for the extended period due to doubts arising from conflicting decisions. The appellant cited the case of Dharti Automobiles and Charak Pharma P. Ltd. as supporting their position.

The Revenue, represented by the Superintendent (AR), supported the findings of the impugned order and referenced Tribunal judgments in favor of upholding the demand, including cases like Gopinath Agencies and Javiya Marketing.

After hearing both sides and examining the records, the Tribunal acknowledged the merit of the case as conceded by the appellant, sustaining the demand for the normal period. However, regarding the limitation issue, the Tribunal found that the matter was not free from doubt, especially considering the Larger Bench decision in the Pagariya Auto Center case. The Tribunal also noted the decision of the Hon'ble Gujarat High Court in Charak Pharma, which held that invoking the extended period is not appropriate when a matter is referred to a Larger Bench. The Tribunal distinguished the cases cited by the Revenue, highlighting that the issue of limitation was not present in Gopinath Agencies and the decision in Javiya Marketing did not consider the relevant High Court judgment.

Consequently, the Tribunal set aside the impugned order concerning the demand for the extended period and also annulled the entire penalty. The appeal was partly allowed based on the above considerations.