2018 (5) TMI 1212 - AT - Service Tax

Business Auxiliary Services - appellant is engaged in providing the service of Authorized Service Station in respect of two wheelers of TVS Motors Ltd - Department was of the view that the commission amounts received are by way of provision of Business Auxiliary Service and hence, service tax is liable to be paid on such commission amounts received - Benefit of N/N.25/2003 dated 01.07.2003 and N/N. 14/2004 dated 10.09.2004 - Held that - the activity undertaken by the appellant is in addition to the service of provision of Authorized Service Station. The act of receiving commission for facilitating loans for various financial institutions will be covered within the category of Business Auxiliary Service' since such service has been provided by the appellant on behalf of financial institutions. Benefit of N/N. 25/2003 dated 01.07.2003 for the period 01.07.2003 to 09.09.2004 - Held that - the services provided by the appellant can be covered under services provided by a commercial concern on behalf of the client . It may also be covered under (e) which refers to services provided by anybody corporate other than a financial company or institution. In any case for the period 01.07.2003 to 09.09.2004, the appellant will be entitled to the benefit of the N/N. 25/2003 dated 01.07.2003 - benefit allowed. Benefit of N/N. 14/2004 dated 10.09.2004 for the period from 10.09.2004 till 31.03.2005 - Held that - Since the appeHant does not fall in any of the exclusion categories specified in the Notification, the appellant will be entitled to the benefit of the Notification 14/2004 for the period from 10.09.2004 till 31.03.2005. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether commission amounts received for facilitating loans from financial institutions are liable to service tax under Business Auxiliary Service.
- Applicability of Notifications No. 25/2003 dated 01.07.2003 and No. 14/2004 dated 10.09.2004 for exemption from service tax.

Analysis:
1. The appeal challenged the demand for service tax on commission amounts received by the appellant for facilitating loans from financial institutions, contending that the services were rendered on behalf of the client, entitling them to exemption under specific Notifications.

2. The appellant argued that the services provided were on behalf of clients and cited Notifications No. 25/2003 and No. 14/2004 to support their claim for exemption from service tax for the respective periods mentioned.

3. The Revenue contended that the activities of the appellant fell under Business Auxiliary Service, citing relevant case laws and decisions, asserting liability for service tax on the appellant's activities.

4. After hearing both parties and examining the records, the Tribunal found that the appellant's activity of receiving commission for facilitating loans qualified as Business Auxiliary Service, as it was provided on behalf of financial institutions. However, the appellant claimed entitlement to exemption under the mentioned Notifications for the entire disputed period.

5. The Tribunal analyzed Notification No. 25/2003 and determined that the services provided by the appellant could be covered under services provided by a commercial concern on behalf of the client, entitling them to exemption for the period 01.07.2003 to 09.09.2004.

6. Regarding Notification No. 14/2004, the Tribunal noted that the benefit extended to service on behalf of the client, with restrictions on certain categories of service providers. As the appellant did not fall within the exclusion categories, they were deemed eligible for exemption from service tax for the period from 10.09.2004 to 31.03.2005.

7. Despite references to case laws and decisions by the Revenue, the Tribunal upheld the appellant's claim that they were rendering Business Auxiliary Service and were entitled to the benefits of specific Notifications, ultimately setting aside the demand for service tax for the disputed period and allowing the appeal.