2010 (2) TMI 339 - AT - Service Tax

Stay- Banking and other Financial Services- The issue involved is regarding service tax liability on Banking and Other Financial Services and also service tax liability on Business Auxiliary Services . Appellant working as commission agent for companies engaged in money transfer. Service tax on loans stated as paid as per own calculation. Liability to service tax arguable. Prima facie case not made out for complete waiver of pre-deposit. Pre-deposit of Rs. 25 lakhs directed.

Summary

Issues:
1. Service tax liability on 'Banking and Other Financial Services'.
2. Service tax liability on 'Business Auxiliary Services'.

Analysis:
1. The issue of service tax liability on 'Banking and Other Financial Services' was raised in the case. The appellant provided gold loans to customers, and a service tax demand of Rs. 26,48,544/- was imposed. The appellant had already paid Rs. 20,86,391/- based on the cum-duty value of the services rendered. The Counsel argued that the liability to pay service tax is disputable, and all legal points could be addressed during final disposal. The Tribunal found that a prima facie case for complete waiver of pre-deposit was not established. The appellant was directed to deposit an additional amount of Rs. 25,00,000/- within eight weeks, with the waiver of pre-deposit for the balance amount subject to compliance.

2. Regarding the service tax liability on 'Business Auxiliary Services', amounting to Rs. 65,42,664/-, the appellant worked as a commission agent for companies involved in money transfer. The Counsel contended that the service tax on commissions received from a particular company had already been paid by that company. The Departmental Representative argued that without proper records of the amounts paid on such commissions, the appellant should be held liable. The Tribunal noted the lack of a clear record of payments and directed the appellant to deposit Rs. 25,00,000/- within eight weeks, with a waiver of pre-deposit for the remaining amount subject to compliance and pending the appeal's disposal.

In conclusion, the Tribunal addressed the issues of service tax liabilities on 'Banking and Other Financial Services' and 'Business Auxiliary Services' in detail. The appellant was required to make additional deposits within a specified timeframe, with a waiver of pre-deposit for the balance amounts subject to compliance. The decision ensured that the legal points raised by both parties could be examined thoroughly during the final disposal of the appeal.