2016 (10) TMI 280 - AT - Service Tax

Valuation - Service tax liability - Business Auxiliary Service - Commission received for marketing the loan of the banks/financial institutions - an amount of ₹ 28,27,901/- has been added to the taxable value which is a loan amount received from ICICI bank and not the commission - appellant submitted that there is a error committed by the ICICI bank by adding the loan amount in the commission and an amount of ₹ 2,41,231/- was not received during the impugned period and as such not liable to service tax - Held that - the factual claims made by the appellant requires to be considered by the Original Authority in order to arrive at the correct quantum cf service tax. As such, we set aside the impugned order and remand the matter to the Original Authority for re-adjudication after taking into consideration the material evidence filed by the appellants in support of their various claims. - Appeal allowed by way of remand

Issues involved:
1. Dispute over service tax liability under "Business Auxiliary Service"
2. Contesting the valuation for tax liability
3. Inclusion of specific amounts in taxable value
4. Error in adding loan amount to commission
5. Disputed advertisement expenses not liable for tax
6. Appropriation of already paid service tax

Analysis:

1. Dispute over service tax liability under "Business Auxiliary Service":
The case involved a service tax liability of ?5,87,834 confirmed against the appellant for providing "Business Auxiliary Service" as car dealers arranging loans for customers. The main contention was the taxation of income received for marketing loans from banks and financial institutions under the category of BAS for the period from July 2003 to December 2004.

2. Contesting the valuation for tax liability:
The appellant did not dispute the tax liability but contested the valuation, claiming that certain income not liable to tax was included in the calculation. They submitted a detailed chart of amounts received during the period that should not be taxed, highlighting an amount of ?28,27,901 received as a loan from ICICI bank, not as commission. They argued that errors by the bank led to incorrect taxation.

3. Inclusion of specific amounts in taxable value:
Various specific amounts were disputed as being incorrectly included in the taxable value. For instance, an amount of ?2,41,231 not received during the period, ?2,22,814 for a holiday trip reward, and ?2,22,885 for shared advertisement expenses were claimed to be non-taxable under BAS. Additionally, an amount of ?660 already paid as service tax was not considered in the order.

4. Error in adding loan amount to commission:
The appellant argued that the loan amount received from ICICI bank was wrongly added to the commission for taxation purposes, emphasizing that TDS had been deducted on the loan amount. They provided an affidavit to support this claim, stating that the bank's error led to the incorrect inclusion of the loan amount in the taxable value.

5. Disputed advertisement expenses not liable for tax:
An amount claimed to be towards shared advertisement expenses was contended as not falling under the purview of taxable services, further strengthening the appellant's argument against the tax liability on specific amounts.

6. Appropriation of already paid service tax:
The issue of ?660 already paid as service tax not being appropriated in the order was highlighted, indicating an oversight in the initial assessment that needed to be rectified.

In conclusion, the Tribunal found merit in the appellant's contentions regarding the valuation and inclusion of specific amounts in the taxable value. The matter was remanded to the Original Authority for re-adjudication, considering the evidence provided by the appellant. The appeal was allowed by way of remand, ensuring a fair opportunity for the appellant to present their case, and the stay application was also disposed of.

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