2023 (12) TMI 1210 - AT - Service Tax

Non-payment of service tax - gross amount of commission received by the appellant under business auxiliary service - extended period of limitation - HELD THAT - A perusal of the order passed by the Commissioner (Appeals) indicates that what was examined by the Commissioner (Appeals) was whether the services rendered by the appellant would fall under business auxiliary service , as defined under section 65 (19 (vi) of Finance Act, 1994, or under business support service as defined under section 65 (104c) of the Finance Act, 1994. After a careful analysis of services provided, the Commissioner (Appeals) after noticing that business support service was subjected to levy of service tax from 01.05.2006 and since there was no amendment in the definition of business auxiliary services , recorded a categorical finding that the activity of the appellant would not fall under business auxiliary service . The demand made for the period April, 2005 to March, 2006 was, therefore, set aside. On perusal of the order dated 23.04.2012 passed by the Commissioner (Appeals) shows that a categorical finding has been recorded that the services would appropriately fall under the category of business support service, which service was made taxable with effect from 01.05.2006. The period involved in the present appeal is prior to 01.05.2006. The order dated 16.01.2018 passed by the Commissioner (Appeals) cannot, therefore, be sustained and is set aside - appeal allowed.

Summary

Issues involved: Appeal against order confirming demand of service tax under 'business auxiliary service' under section 65 (19) (vi) of Finance Act, 1994.

Summary:
The appellant, a dealer of Maruti cars, arranged finance/loans for customers and received commissions from banks and financial institutions. A show cause notice was issued alleging non-payment of service tax on the commission. The Additional Commissioner confirmed the demand, which was upheld by the Commissioner (Appeals). The appellant argued that the services provided fell under 'business support service' instead of 'business auxiliary service'. The Commissioner (Appeals) had previously ruled in favor of the appellant in a similar case for a different period. The department contended that the impugned order did not require interference.

The Commissioner (Appeals) analyzed the services provided by the appellant and found that they did not fall under 'business auxiliary service' but under 'business support service'. The demand for a specific period was set aside in a previous case. The department's appeal on the issue of limitation was dismissed by the Tribunal, finalizing the decision on merits. Therefore, the Commissioner (Appeals) order in the present appeal could not be sustained. Additionally, a previous order had categorically determined that the services fell under 'business support service', taxable from a later date than the period in question. Consequently, the impugned order was set aside, and the appeal was allowed.