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TMI Blog2016 (2) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... 18,46,791/- and interest thereon besides imposing penalties; they had paid Rs. 13,61,914/- towards tax and Rs. 1,41,356/- towards interest during the pendency of investigation and adjudication. 2. M/s Baven Desai contracted with M/s ABN Amro Bank to carry out activities relating to credit/debit cards and other products offered by the bank. As the 'direct sales team' of the bank operating in many cities, they were entrusted with the task of tele-calling, identifying of potential customers, sourcing applications and forwarding the same to the bank for which it is claimed that Rs. 40,000/- per month was paid as remuneration besides being reimbursed for certain expenses incurred by them. According to Revenue, M/s Baven Desai renders 'business auxiliary service' to M/s ABN Amro Bank and the 'reimbursable expenses' cannot be excluded from computation of taxable value. During investigation of the designated bank account in which M/s ABN Amro Bank had been depositing payments in accordance with the contract, M/s Baven Desai was found to be in receipt of Rs. 2,12,79,930/-. Admittedly, they could furnish expense vouchers amounting to Rs. 1,49,47,365.58 and service t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the activities contracted are taxable under section 65(105)(zzzq). Learned Authorized Representative drew attention to the agreement of the assessee with the bank as falling squarely within the definition in section 65(19)(ii) as held in the impugned order and to the terms of the agreement regarding reimbursement which could by no stretch be called 'out of pocket' expense. On the matter of appeal of Revenue, the grant of 'cum-tax' benefit and dropping of penalty under section 76 of Finance Act, 1994 was contended to be beyond the scope of permissible discretion. 7. The contentions regarding jurisdiction and wrongful disposal of adjudication order have been discussed at length in the impugned order. The very same contentions, as well as grounds thereof, were made before the first appellate authority; no fresh material has been furnished before us and we find ourselves to be in concurrence with the evaluation by, and conclusion of, the first appellate authority that there is no lapse of jurisdiction or lapse of authority in the rendering of adjudication by Additional Commissioner of Service Tax, Mumbai. 8. Turning to the issue of wrongful classification of ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) any incidental or auxiliary support service such as billing, collection or recovery of cheques, accounts and remittance, evaluation of prospective customer and public relation services, and includes services as a commission agent.....' With effect from 10th September 2004, the following were also incorporated in that definition (iv) procurement of goods or services, which are inputs for the client; or (v) production on behalf of, the client; (vi) provision of service on behalf of the client; and the existing (iv) was renumbered as (vii) and expanded. 10. Though the assessee has admitted to rendering service to M/s ABN Amro Bank, its contention is that the service rendered was not taxable on that date. It is moot whether the entire range of activities that composed the service rendered by M/s Baven Desai was liable to be taxed under a single category. They have, themselves, drawn attention to two categories of receipts indicating that more than one service is rendered. The decision of this Tribunal in re SR Ka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rendered. Such an exercise is not perceptible in the proceedings before the lower authorities. 13. M/s Baven Desai entered into agreement with their client which, inter alia, provides for reimbursement of certain expenses. No effort appears to have been taken to ascertain if these expenses are attributable to services rendered and if the services to which these can be attributed are taxable. The chargeability of certain amounts received being attributable to a particular taxable service cannot be presumed to confer authority to tax other amounts received from the same entity for services unknown. That would not be a tax on services but a tax on receipts which is not the legislative intent or objective of taxing services. 14. To ascertain the quid pro quo for the consideration, facts and circumstances of the transaction must be comprehended. The client M/s ABN Amro Bank, offers financial products for a customer base spread across the country. The provenance of such products should visibly be linked to the financial institution; that is, and has been, the peculiarity of the banking sector since it first came into being. M/s Baven Desai, notwithstanding its credibility within its ..... X X X X Extracts X X X X X X X X Extracts X X X X
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