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TMI Blog2012 (5) TMI 444X X X X Extracts X X X X X X X X Extracts X X X X ..... ad with Notification No.14/2004 dated 10.9.2004 granted immunity to the Appellant from levy – Held that:- service provided by the Appellant in the present case was to the financing bank but not to the borrower. Relation between the Appellant and the bank proves that there was quid pro quo between the Appellant and the bank to meet the requirement of funding. The Appellant had only served the bank but not acted on behalf of the bank. Borrower was not privy to the contract between the Appellant and the bank. So also in absence of any letter of appointment and agreement. Appellant has no scope to be benefited by the amendment of law. Penalty - held that:- But while appreciating the levy was new imposition of penalty under Section 78 and 76 of the Act, simultaneously shall be harsh. Therefore levy of penalty under Section 78 shall be proper dose to prevent the Appellant from recurrence of the contravention of law and to cause loss of revenue. - ST/262 of 2008-Cus. - - - Dated:- 28-6-2011 - Shri D.N. Panda, Shri Mathew John, JJ. Appearance: Appeared for Appellant : Shri Naresh Gupta, Advocate Appeared for Respondent : Shri K.K. Jaiswal, SDR Per D.N. Panda : Ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore should not be denied of concession in levy of penalty when the tax dues to the Government has been discharged prior to Adjudication except the penalty element discharged within 35 days of the receipt of Adjudication order. Tribunal has ample power to condone the five days delay to consider the case of the Appellant for the concessional penalty. However, even such a penalty is not imposable in absence of essential ingredients relating to loss of revenue. 5. On the other hand, ld. DR supports the first Appellate order. But disputes the quantum and payment of tax and penalty element submitting that the same is subject to verification, since he does not have information about such payment. It was also submitted by ld. DR that at page-7 of the written submissions filed by the Appellant having described the nature of activity carried out, that fulfils the requirement of the taxing entry bringing the Appellant to the fold of business auxiliary service. Ld. DR inviting attention to para-3 of the Show Cause Notice submits that intelligence was also gathered to put to test with the proprietor of the Appellant concerned to find out what the Appellant understood about the liability. Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... les to enable the bank to consider its funding activity. All these facts and attendant circumstances bring the bank and the Appellant to the understanding as taxable service provider and recipient of such service. The recipient being identified by the understanding of the parties in accordance with recorded fact, no plea contending that the Appellant has not served the bank is untenable. Therefore, deciding the first issue raised by the Appellant, we hold that the Appellant provided 'Business Auxiliary Service' to the bank as is concluded by the Appellate order resulting in liability to service tax under the Act. Adjudication therefore resulted in levy of tax of Rs.3,23,789/-. We deal the penalty aspect separately. This calls for confirmation of the tax demand raised. 7.4 In the third issue, the grievance of the Appellant is that Show Cause Notice was time barred. We proceeded to enquire the date of visit by the investigating agency and date of issuance of the Show Cause Notice. Being guided by the Apex Court's judgement in CCE, Visakhapatnam Vs. Mehta Co. reported in 2011 (264) ELT 482 (SC), we are able to find that when investigation was made escapement of tax of levy come to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter of appointment and agreement, we are unable to extend the benefit of Notification No. 14/2004 dated 10.9.2004 to the Appellant and that issue is answered negatively. The Appellant has no scope to be benefited by the amendment of law. 9. Fourth issue raised was that if at all an attempt is made to tax the service provided by Appellant, the processing fee recovered by the bank having included the commission paid to the Appellant and tax thereon having been paid by the bank, such attempt will amount to double taxation and no tax can be collected from the Appellant. There is no evidence produced to appreciate pleading of the Appellant on such count. Also in absence of the appointment letter we are unable to understand how the processing fees collected by the bank included commission paid to the Appellant and that has suffered tax. Therefore, the plea of double taxation being unsound is unsustainable and decided against the Appellant. 10. Prayer of the Appellant in part of Issue No. 1 was that he had paid tax and interest before Adjudication and paid penalties amounting to 25% of the tax due within 30 days of service of the Adjudication order for which that entitles the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne Financial Services Vs. CST in Appeal No. ST/91/06 decided on 4.1.2007. We have no difficulty to say that had the case of the Appellant fallen within the fold of Nizam Sugar Factory case the Appellant would have been benefited by that judgment. Here is a case where levy of service tax by law is already nine years old. The Appellant was aware that certain services were taxable. He was a service provider to the bank and an amount of Rs.41,34,000/- was also received. Plea of innocence does not appear to be sound in absence of evidence showing sincere efforts of the Appellant to seek clarification from the department as to whether its service shall be taxable. There is nothing on record to show that till investigation was done, the Appellant made efforts to be registered. Without registration, the Appellant kept the department in dark to know his affairs. When the investigation found that there has arisen a liability, Show Cause Notice was issued. 11.2 There is no material to appreciate that the Appellant to be innocent for the other reasons that the Appellant is capable of preparing the profile of the borrowers studying their various documents provided by borrowers. There is no e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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