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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 ..... 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 - due to interpretation of classification of services extended period cannot be invoked - It is settled law that where in the case, the issue involved is of interpretation of law, the extended period cannot be invoked. 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 March , 2005 deserves to be set aside. As regard the demand for the period April and May, 2005 in respect of services provided to HDFC bank towards promotion and marketing of loan under Business Auxiliary Services, the same requires re-quantification on the ground that Adjudicating authority has not conclusively established t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 9/7/2004, the exemption has been withdrawn and the commission agent require to pay service tax from 9/7/2004.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 ₹ 76,05,431/-. In respect of commission received towards sales of the car, demanded of service tax amounting to ₹ 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 classified as commission under Business Auxiliary Services and the service tax demand thereon was confirmed, in additionm the penalties under Section 76, 77 and 78 were also imposed. Aggrieved by the adjudication order the appellant is before us. 3. Shri. R.G. Sheth, Ld. Advocate with Puloma Dalal. C.A. and Ms. Pinky, Advocate for the appellant at the outset submit that on the same services there was serious confusion and ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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-ALL] (h) Board Circular No. 87/05/2006-ST dated 6/11/2006. He further submits that adjudicating authority has confirmed the demand on the basis of data collected from HDFC bank towards commission accounted for in relation to the appellants transaction. He submits that entire amount shown by the bank in their books was not received by the appellant. As per the prevailing law at material time only actual amount received towards services can only be chargeable to service tax. Therefore the amount of commission received from the bank and accounted for in the books of account of the appellant will only be chargeable to the service tax therefore quantification made in the show cause notice as well as confirmation of demand of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices and thus it is taxable. Ld. Counsel cited various judgments wherein on identical services the tribunal has taken consistent view that due to interpretation of classification of services extended period cannot be invoked. It is also observed that the issue being debatable and there were conflicting decision on the very same issue the matter was referred to the larger bench in case of Pagariya Auto Center(supra). It is settled law that where in the case, the issue involved is of interpretation of law, the extended period cannot be invoked. Therefore in the present case also all the circumstances are common as existing in various judgments which are reproduced below: Bridgestone Financial Services 5 . We have gone through the records of the case carefully. Shri Sharath Reddy, Proprietor of the appellant has given a statement before the Superintendent, Central Excise on 20-9-2004 regarding the services rendered by his unit. He has enclosed copies of the agreement entered with M/s. Citi Bank N.A. M/s. Citi financial Retail Services India Ltd. A statement has also been taken from Shri Nazar Ali, General Manager on the same day. Shri Sharath Reddy has s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iv) any incidental or auxiliary support service such as billing collection or recovery of cheques, accounts and maintenance, evaluation of prospective customs public relation services, as a Commission agent, but does not include any information technology service . From the above, it is seen that promotion or marketing of services provided by the client also come under the category of Business Auxiliary Services. Therefore, we are not inclined to accept the contention of the appellant that services provided by them would not come under the category of Business Auxiliary Service during the relevant period. The appellants actually source customers for Citibank, Citifinancial Retail Services for personal loans and housing loans. The actual agencies which provide the financial service by giving loans are Citibank and Citifinancial Retail Services. They are actually clients of the appellants. Since the appellants promote the services rendered by their clients, it is very clear that during the relevant period, the services rendered by the appellant would definitely fall within the category of Business Auxiliary services. However as far as the present case is concerned. This is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry service . 15 .The period involved in this appeal is prior to 10-9-2004. The Show Cause Notice was issued on 31-7-2007. This Appellant is paying service tax from 10-9-2004. 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. In this case also the demand is raised beyond the time limit of one year and such demand cannot be sustained. South City Motors Ltd The Appellants are dealers of Ford Motor vehicles and they had entered into agreements with different banks such as HDFC Bank, ICICI Bank, ABN Amro Bank, Chartered Bank and Citi Bank and also with Non-Banking Financial Companies; (NBFCs) such as Ford Credit Kotak Mahindra Ltd. to market car-loan to potential customers. For loan taken by the customers, these appellants got commission from the banks and NBFCs. The issue in this appeal is whether service tax is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not imposable either. Charak Pharma P. Ltd 3. The respondent herein is a manufacturer of pharmaceutical products. The dispute which was raised before the Tribunal is with regard to the assessable value of the physician sample packs distributed free of cost. The Tribunal has noted that on merits, this issue has been decided by the Larger Bench of the Tribunal in case of Cadila Pharmaceuticals Limited, reported in 2008 (232) E.L.T. 245, with regard to the period involved, a show cause notice was issued on 11th June, 2008 and relying on the Tribunals decision in case of M/s. Marsha Pharma Private Limited, the demand was held barred by limitation. Seeking support from the order in case of M/s. Marsha Pharma, where the Bench has observed that the extended period would not be invoked in cases where the matter is referred to the Larger Bench and also discussed the effect of the Circular issued by the Board, the Tribunal held in the instant case that the demand is barred by limitation. Gemini Mobiles Pvt Ltd 4. The issue whether the activities pursued or services provided by the dealers of motor vehicles in such circumstances fall within the ambit of BAS d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso 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 the period is therefore within the normal period of limitation. In the light of the fact that there were conflicting decisions of the Tribunal which stood resolved by the Larger Bench decision in Pagariya Auto Center (supra), we are satisfied that invocation of the extended period was not justified. We so declared the position. The appellants are however liable to tax, interest and penalties for the normal period of limitation specified in Section 73. 8. We therefore set aside the respective orders-in-appeal, confirming the respective adjudication orders and remand the matter to the primary adjudicating authority for re-determination of the appellants' liability to tax, interest and penalties for the normal period of limitation, if at all, after proper classification of the transaction in issue in the light of the decision and clarifications issued in Pagariya Auto Center (supra) and after issuing notice to the appellants herein intimating the date for personal hearing. No costs. Circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be invoked therefore service tax demand upto March 2005 is hit by limitation therefore demand pertaining to the period July, 2003 to March , 2005 deserves to be set aside. As regard the demand for the period April and May, 2005 in respect of services provided to HDFC bank towards promotion and marketing of loan under Business Auxiliary Services, the same requires re-quantification on the ground that Adjudicating authority has not conclusively established that what is the actual receipt of service charges by the appellant during the period April, 2005 and May, 2005. As regard the services of sales commission in respect of sale of the vehicle for which demand of ₹ 1,42,114/- was confirmed, we find that appellant has claimed notification No. 14/2004-ST dated 10/9/2004, which is reproduced below: Service tax exemption to specified services in relation to Business auxiliary service In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service provided to a client by a commercial c ..... 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