2018 (7) TMI 1441 - AT - Service Tax

Business Auxiliary Service - appellant is engaged in providing D.S.A. Service to M/s ICICI HFC Ltd. for promotion of their loans and received Commission - Held that - The issue stands settled against the assessee on merit. In the case of Brij Motors Pvt. Ltd. V/s Commissioner 2011 (11) TMI 410 - CESTAT, NEW DELHI the Tribunal held that for the loan taken by the customers, if the assessee is getting some commission from bank, the same amounts to promotion and marketing of services provided by the client and is liable for payment of Service Tax under the category of Business Auxiliary Service - demand upheld. Time Limitation - Held that - The appellant has not been cooperating with the Department even during the investigation. The service tax under Business Auxiliary Service included the activities covered in the present dispute w.e.f. 10.09.2004 but it is noticed that the appellant has not taken registration and has failed to pay Service Tax and file the statutory returns. Even when the Department sought details of commission received by the appellant from the M/s ICICI HFC Ltd, the assessee failed to respond to the letter of the Department and even summons issued to them - this conduct amounts to willful and deliberate and withholding and of suppression facts - invocation of extended period is justified. Appeal dismissed - decided against appellant.

Summary

Issues:
1. Liability for payment of Service Tax on commission received for promotion of loans under 'Business Auxiliary Service'.
2. Application of extended period of limitation under Section 73 for raising the demand.

Analysis:

Issue 1: Liability for payment of Service Tax on commission received for promotion of loans under 'Business Auxiliary Service'
The appellant was engaged in providing D.S.A. Service to a company for loan promotion, and the department ordered payment of Service Tax on the commission received under the category of 'Business Auxiliary Service'. The appellant contested the demand on the ground of limitation, arguing conflicting decisions and the delayed show cause notice. The Department supported the demand, citing non-cooperation and suppression of facts by the appellant. The Tribunal upheld the demand, citing a previous case where commission from a bank for loans was considered promotion and marketing of services, falling under 'Business Auxiliary Service'. The Tribunal found the impugned order sustainable on merit due to the nature of the appellant's activities.

Issue 2: Application of extended period of limitation under Section 73 for raising the demand
The appellant argued for setting aside the demand based on limitation, as the show cause notice was issued beyond the normal period. The Department invoked the extended period of limitation under Section 73, pointing out the appellant's lack of cooperation during the investigation. The appellant failed to register, pay Service Tax, or provide details of commission received, despite multiple requests from the Department. The lower Authorities deemed this conduct as willful withholding and suppression of facts, justifying the invocation of the longer time limit. Consequently, the impugned order was sustained, and the appeal was rejected based on the appellant's non-cooperation and suppression of relevant information.