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2013 (4) TMI 415 - AT - Service TaxBusiness Auxiliary Service - confirmation of service tax along with interest and equal amount of penalty u/s 78 - respondents are working as sourcing agent for ICICI and are sourcing persons to ICICI Bank for purpose of home loans - Commissioner (Appeal) allowed the appeal of assessee relying on S.R. Kalyanakrishnan Vs Commissioner of Central Excise Cochin reported in (2007 (8) TMI 198 - CESTAT BANGALORE) - Held that - As decided in M/s Bridgestone Financial Services Vs C.S.T Bangalore (2007 (1) TMI 67 - CESTAT BANGALORE) that promoting or marketing of service comes under Business Auxiliary Services. Also Tribunal in case of Brij Motors Pvt. Ltd. (2011 (11) TMI 410 - CESTAT NEW DELHI) and S.K. Jalendra & Associates (2012 (5) TMI 444 - CESTAT DELHI) after considering the decision in Bridgestone Financial Service case held that these services are classifiable as Business Auxiliary Services. Thus activity of sourcing person for the purpose of home loans by ICICI is Business Auxiliary Services. Thus Order in Original restored. In favour of Revenue.
Issues:
1. Classification of services provided by the respondents under Business Auxiliary Service for service tax purposes. Analysis: The case involved three appeals filed by the Commissioner of Central Excise Indore against a common Order in Appeal. The respondents, acting as Sourcing Agents for M/s ICICI Home Loans Ltd., were found to be providing services by sourcing individuals to M/s ICICI for home loans. The department contended that these activities fell under Business Auxiliary Service for the purpose of Service Tax. Show Cause Notices were issued, leading to the confirmation of service tax, interest, and penalties by the original authority. However, the Commissioner of Central Excise (Appeal) allowed the respondents' appeal, prompting the Revenue to file three appeals against the same Order in Appeal. Upon review, it was noted that the respondents were indeed acting as sourcing agents for ICICI, introducing customers for home loans, and receiving fees and commissions in return. The Revenue argued that these activities were chargeable to service tax under Business Auxiliary Service. The definition of Business Auxiliary Service was crucial, with different entries during specific time periods. The respondents were primarily engaged in promoting or marketing services provided by ICICI, falling under the relevant definitions of Business Auxiliary Service pre and post a specific date. The Commissioner (Appeal) had relied on a previous Tribunal decision that classified such services as Business Support Service. However, it was highlighted that another Tribunal decision had classified similar services as Business Auxiliary Services. Considering the latter decisions, the activity of sourcing individuals for home loans by ICICI was deemed to be Business Auxiliary Services. Consequently, the impugned Order in Appeal was set aside, and the original Order was restored in favor of the Revenue. In conclusion, the Revenue's appeals were allowed, emphasizing the classification of the services provided by the respondents under Business Auxiliary Service for service tax purposes.
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