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TMI Blog2018 (6) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... he name of the appellant itself reflects that it is not an individual but a commercial concern. The activity of the appellant herein is not solely or merely verification of credentials of prospective customers but appellants were also engaged in other activities like preparation of invoices / Bills, collection / recovery of installments from the defaulters / borrowers of the bank etc. These activities are nothing but providing incidental or auxiliary services to HDFC Bank in collecting the overdue installments etc. from the customers of HDFC and would definitely fall within the ambit of Section 65 (19)(iv) of the Finance Act prior to 10.09.1994 and Section 65 (19) (vii) after 10.09.2004 - the activities of the appellant would constitute BAS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ual penalty of Rs. One crore under section 78 of the Finance Act, 1994. Hence this appeal. 2. On behalf of the appellant, ld. counsel Shri V.S. Manoj made oral as well as written submissions. Firstly, it is argued that the appellant is a proprietorship concern and not a commercial concern and therefore is not liable to pay service tax under Business Auxiliary Service. That during the relevant period, definition of Business Auxiliary Service covered services provided by "commercial person" only which was later amended by substituting the words „provided by any person‟. Thus, the appellant not being a commercial concern is not liable to pay service tax. Secondly, the activities rendered by the appellant as alleged in the show cau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ught within the service tax net only with effect from 1.5.2006. Thus, the activity of recovery of installments from defaulted borrowers cannot be classified under Business Auxiliary Service since the more specific description of the activity would fall under „Recovery Agent Service‟ and not Business Auxiliary Service. The ld. counsel has also strongly argued on the ground of limitation. The period involved is July 2003 to March 2006 and the show cause notice is dated 27.4.2007. In the instant case, the issue is purely subject matter of interpretation and whether the activity of the appellant would fall within the taxable service of Business Auxiliary Service is highly contentious due to the repeated amendments brought to the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment verification and negative data based check. After completion of verification, the duly signed verification reports are submitted to the bank to enable the bank to arrive at the decision whether to sanction loan / credit card. Thus, they were engaged in both verification as well as collecting installments and the decision in the case of Katiyil & Associates (supra) is distinguishable. Appellants had not taken registration from 1.7.2003 to 31.3.2004 and had taken registration only on 2.4.2004. Even after taking registration, they did not discharge the service tax liability till March 2006. The appellants are therefore guilty of willful suppression of facts with intent to evade payment of service tax. The show cause notice therefore issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client;] (v) Production or processing of goods for, or on behalf of, the client; (vi) Provision of service on behalf of the client; or (vii) A service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, And includes services as a commission agent, [but does not include any activity that amounts to manufacture of excisable goods.] 6. The ld. counsel for appellant has put f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s / borrowers of the bank etc. In our view, these activities are nothing but providing incidental or auxiliary services to HDFC Bank in collecting the overdue installments etc. from the customers of HDFC and would definitely fall within the ambit of Section 65 (19)(iv) of the Finance Act prior to 10.09.1994 and Section 65 (19) (vii) after 10.09.2004. It is also to be kept in mind that the scope of incidental or auxiliary support service as enacted in 65 (19) (iv) /65(19)(vii) is given in the nature of inclusive definition and only example of the type of activity that would come within that category having listed therein. The collection of overdue installments and other outstanding payments from the customers of HDFC very clearly fall within ..... X X X X Extracts X X X X X X X X Extracts X X X X
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