9911796707
TMI Blog2018 (3) TMI 416X X X X Extracts X X X X X X X X Extracts X X X X ..... reement with the financial institutions/banks and hence there can be no service tax liability. Held that: - MUL receive 3.5% commission from the financial institutions out of which 3% is passed on to the dealer. Adjudicating authority has concluded that the fact of commission routed through MUL is of no consequence in view of Section 67 of the Act as value for any taxable service shall be the gross amount charged by the service provider for taxable service rendered by him to his client and that it is nowhere provided that money should flow directly from the service recipient. In the case of CCE, Jaipur vs. Ajmer Automobiles Pvt. LTd. [2012 (8) TMI 535 - CESTAT, NEW DELHI], on similar issue, the Tribunal has held that since MUL had pai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalties under various provisions. Original authority confirmed these proposals in an adjudication order date 7-8-2007. In appeal, the Commissioner (Appeals) vide impugned order dated 17-01-2008, upheld the order of the original authority, hence this appeal. 2. On 23.01.2018, when the matter came up for hearing, on behalf of the appellant, Ld. Counsel Shri B. Venugopal, reiterated the grounds of appeal and also made written and oral submissions which can be broadly summarized as under: a) Definition of business auxiliary service was underwent a change w.e.f. 01-07-2003, through Finance Act, 2004, wherein the scope of service had been broadened w.e.f. 10-09-2004. b) From a perusal of definition of business auxiliary service prio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is directly received by the dealer from the financial institutions. Under such circumstances, to say that the dealer is rendering the service on behalf of M/s MUL is gross misstatement. Mere fact that M/s MUL have negotiated with the financial institutions as regards the quantum of commission and routing of commission through M/s MUL will not make the services provided by the dealer as having been rendered on behalf of M/s MUL. b) M/s MUL has negotiated with financial institutions on behalf of the dealers in order to ensure a better deal and in the process M/s MUL is retaining 0.5% of the commission for themselves rather than the each dealer negotiating with financial institutions for the percentage of the commission, it is advantageo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not entered any agreement with the financial institutions/banks and hence there can be no service tax liability. Only MUL have entered into agreements with the financial institutions and banks. 4.2) From the facts on record, we note that MUL receive 3.5% commission from the financial institutions out of which 3% is passed on to the dealer. Adjudicating authority has concluded that the fact of commission routed through MUL is of no consequence in view of Section 67 of the Act as value for any taxable service shall be the gross amount charged by the service provider for taxable service rendered by him to his client and that it is nowhere provided that money should flow directly from the service recipient. 4.3) We find that identical is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MIBL/MUL providing their respective services. We find that it was the clients of MIBL/MUL that received those services which promoted the sale of insurance by NIC and sanction of loans by finance companies. The appellants or MIBL/MUL did not render any other service which promoted sale of insurance by NIC and sanction of loans by finance companies. MIBL paid tax on commission received under IAS. MUL paid tax on commission received for enabling banks/finance companies grant loans to customers of the appellants under BAS. MIBL/MUF paid a part of their commission to the appellants. The impugned activities did not yield any outcome different from those brought about by the services of MIBL/MUL. Once commission is paid for the respective servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontributed to the same outcome. Moreover, if any service tax is paid by the appellants on commission received, MIBL/MUL will be eligible for credit of such tax paid, thereby rendering the impugned demand a revenue neutral exercise. In the circumstances, there cannot be demand of any service tax under BAS for the share of commission received by MIBL/MUL and paid to the dealers. The impugned orders are therefore not sustainable. They are set aside to the extent they affirmed orders-in-original No. 4/2006 and 16/2006 and these appeals are allowed. 4.4) So also in the case of CCE, Jaipur vs. Ajmer Automobiles Pvt. LTd. [2012(26)S.T.R 19 (Tri.-Del.), on similar issue, the Tribunal has held that since MUL had paid the service tax on the enti ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
