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TMI Blog2016 (11) TMI 19X X X X Extracts X X X X X X X X Extracts X X X X ..... from above services of Business Auxiliary services, the appellant also received Commission for the sales of car from car dealer/manufacturer, thus acted as a commission Agent. Such activity is also covered under the category of Business Auxiliary Services by virtue of Notification No. 8/2004-ST dated 9/7/2004, the exemption has been withdrawn and the commission agent require to pay service tax from 9/7/2004. In view of the above observations, the show cause notice was issued demanding service tax on the commission received from the bank for the period 1/7/2003 to May 2005 for an amount of Rs. 76,05,431/-. In respect of commission received towards sales of the car, demanded of service tax amounting to Rs. 1,42,114/- was also proposed. In the adjudication it was held that services provided to the bank towards sale of loan to various customers is classified under Business Auxiliary Services and the service tax demand was confirmed. Similarly, in respect of commission received towards sales of vehicle was cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d should not be invoked. It is also settled law that when there are conflicting views on particular legal issue and if the matter is referred to the larger bench that itself shows that issue involved is of interpretation of law and therefore extended period cannot be invoked. He also submits that on the identical case this Tribunal in various judgments though held that services is classifiable under Business Auxiliary Services but at the same time it was held that extended period cannot be invoked. He placed reliance on the following judgments: (a) Bridgestone Financial Services Vs. Commr of S.T. Bangalore[2007(8) STR 505(Tri. Mum)] (b) Roshan Motors Ltd. Vs. CCE, Meerut[2009(13)STR 667(Tri. Del)] (c) City Motors & Financial Services Vs. CCE, Gurgaon[2012(25) STR 449(Tri. Del)] (d) South City Motors Ltd Vs. Commr. Of S.T. Delhi[2012(25) STR 483( Tri. Delh)] (e) Brij Motors Pvt Ltd Vs. CCE, Kanpur[2012(25) STR 489(Tri. Del.] (f) Commr. Of C. Ex. Cus & S.T. Vs. Charak Pharma P. Ltd[2012(278) ELT 319(Guj)] (g) Gemini Mobiles Pvt Ltd Vs. Commr. Of C. Ex. And S.T. Lucknow[2015-TIOL-15670-CESTAT-AL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant to HDFC bank is classifiable as Business Auxiliary Services and liable for service tax. However as regard the submission on limitation, we observed that as per the confusion and doubt prevailing in respect of impugned service, the appellant entertained the bonafide belief that whether any service provided to HDFC bank is classifiable under Business Auxiliary services or Business Support Services. As regard the Business Support Service it became taxable only from 1/5/2006, even there were some judgments wherein it was held that the identical services is of Business Support Service therefore it cannot be said that the appellant has intentionally avoided the payment of service tax. The issue was not free from doubt as even the board also realized and issued a circular dated 6/11/2006 by which it was clarified that the services in question will fall under the category of Business Auxiliary Services and thus it is taxable. Ld. Counsel cited various judgments wherein on identical services the tribunal has taken consistent view&n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndered by them. There is no finding that there was willful suppression of facts with an intent to evade payment of taxes. Even the show cause notice has not properly brought out the intent of the appellant to evade taxes by willful suppression of facts. In these circumstances, the extended period cannot be invoked. Thus the demand is hit by time bar. The appellants strongly contended that the services rendered by them would come only under the category of 'business support services' which was introduced only with effect from 1-6-06. Since the period of demand is prior to 1-6-06, it was urged that the said services could not have been brought under the category of business auxiliary services. We reproduce the definition of "business auxiliary services." "(19) "business auxiliary service" means any service in relation to,- (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or (iii) any customers care service provided on behalf of the client; or (iv) any incidental or auxiliary support service such as billing collection or recovery of cheques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax along with interest and imposed penalties under Section 76, 77 and, 78 of the Finance Act 1994....... ....7. The submission by the learned advocate that this is a case of interpretation of the taxing entry and no mala fide or element of suppression or mis-statement is involved and, therefore, imposition of penalties under Section 76, 77 & 78 is not warranted is acceptable. In view of fact that the case involved interpretation of question of law, we hold that this is not a fit case for imposition of penalty. Therefore, penalties imposed are set aside. City Motors & Financial Services The Appellants had entered into agreements with different banks such as ICICI Bank, HDFC Bank, Citi Bank and Non-Banking Companies (NBFCs) such as Maruti Finance, Maruti Countrywide and Citimobile Finance to market car-loan to potential customers. For loan taken by the customers, the appellants got commission from the banks or NBFCs. The issue in this appeal is whether service tax is to be paid on such commission categorizing the activity of the Appellants as "business auxiliary service". 15.The period involved in this appeal is prior to 10-9-2004. The Show Cause Notice was issued on 31-7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up "ready to interact" outlets in the premises of the Appellants who is in the primary business of selling automobiles. For loan taken by the customers, these appellants got commission from the bank. The issue in this appeal is whether service tax is to be paid on such commission categorizing the activity of the Appellants as business auxiliary service". 14. The period involved in this appeal is 20-10-2004 to 18-12-2007. The Show Cause Notice was issued on 21-2-2008. As can be seen from the discussions above the matter was being interpreted by judicial forums in different ways as may be seen from the decisions quoted by the Appellants. The Higher Courts have been taking the view that in such situations the extended period of time cannot be invoked for raising demand. Even in the case of Bridgestone Financial Services the Tribunal has given the benefit for such reason. So we are of the view that the demand in this case can be sustained only to the extent covered in the normal period of limitation. In such a situation penalties are not imposable either. Charak Pharma P. Ltd 3. The respondent herein is a manufacturer of pharmaceutical products. The dispute which was raised befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity, such consideration may perhaps constitute a rent for the provision of space and associated amenities and such transaction would not amount to BAS. Alternatively, held the Tribunal, if the transactional documents and other material on record indicate a substantial activity falling within the contours of any of the integers of the definition of BAS, spelt out in Section 65(19), then it would be legitimate to conclude that BAS is provided. 6. In the light of the Larger Bench ruling clarifying contours of BAS, in respect of transactions involving automobile dealers and banks or financial institutions, there was a bona fide doubt as to whether appellants herein had provided BAS during the relevant period in issue. Therefore non-filing of returns and non-remittance of tax for rendition of BAS could not be characterised as arising with a view to suppression of material facts or failure to remit tax with an intent to evade the same, inviting application of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994. 7. The period in issue in the present appeals is July 2003 to November 2005. Show cause notice was issued on 31.1.2006. Only part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness auxiliary service". The tax is payable on the gross commission received by the automobile dealer. In some cases, the dealers share part of their commission with their customers to attract them. However, this is an independent transaction between the automobile dealer and the purchaser of the vehicle, and does not involve the service rendered by the automobile dealer to the finance company. Therefore, the tax payable by the dealer would be on the gross amount received from the financial company and not on the balance amount, i.e., after excluding the amount that he passes on to the customer. From the above decisions on identical issue, this tribunal consistently held that in respect of services in question in case of non payment of service tax the extended period is not invokable. In the present case the period involved is July,2003 to May, 2005 whereas the show cause notice was issued on 29/5/2006. As per the discussion made herein above extended period cannot be invoked therefore service tax demand upto March 2005 is hit by limitation therefore demand pertaining to the period July, 2003 to Ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xiliary service in respect of any activity specified in (a) to (d) above in relation to agriculture, printing, textile processing or education. We find that the appellant is proprietary concern therefore they are prima facie eligible for above referred exemption notification as the services is covered under 'provisions of services on behalf of client' which is one of the services specified under the notification. However Ld. Adjudicating authority has not given any findings as regard the claim of this notification categorically made by the appellant before him. We are therefore of the view that eligibility of this Notification should be re-considered by the Adjudicating authority. As regard the penalties imposed under Section 76, 77 and 78, we find that as per our above discussion on limitation, there is bonafide belief of the appellant for non payment of service tax, the appellant has been able to reasonable cause for invocation of Section 80. We are therefore of the view that considering the facts and circumstances as well as discussion made herein above with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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