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TMI Blog2018 (6) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... ed transaction in Books of account, therefore it cannot be said that the appellant has suppressed any material fact with intention to evade payment of Service Tax. The identical facts regarding the limitation was involved in the case of Addis Marketing [2016 (11) TMI 19 - CESTAT MUMBAI], wherein this Tribunal has categorically held that the extended period of limitation cannot be invoked. In the present case the period involved is 10.07.2003 to 31.03.2006, whereas the show-cause notice was issued on 08.10.2007 i.e. after stipulated normal period of one year, therefore the entire demand is hit by limitation - demand not sustainable on the ground of time bar - appeal allowed - decided in favor of appellant. - APPEAL NO. ST/89967/14 - A/86464/2018 - Dated:- 22-5-2018 - SHRI RAMESH NAIR, MEMBER (JUDICIAL) And SHRI RAJU, MEMBER (TECHNICAL) Shri Bhavin Mehta, Chartered Accountant for Appellant Shri M. Suresh, Deputy Commissioner (A.R.) for Respondent Per: Ramesh Nair: The facts of the case are that the appellant are working as Direct Selling Agents (DSA) for marketing of auto loan products of HDFC Bank for which the appellant received commission/incentive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romoting auto finance and handling of documents even if considered as Business Auxiliary Services , it can at best fall under clause (vi) of the definition, namely, provision of service on behalf of client . However, provision of service on behalf of client was exempted from levy of Service Tax by exemption Notification No. 14/2004-ST dated 10.09.2004. The said notification was withdrawn by Notification No. 19/2005-ST dated 07.06.2005 for the reason that the appellant is proprietary concern which was exempted under the said notification. He placed reliance on the decision of Jain Marketing Vs. Commissioner of Service Tax, Chennai 2011 (21) STR 532 (Tri.-Chennai). He further submits that the close proximity under which appellant s activities fall could be the taxable under Business Support Services . The Learned Commissioner (Appeals) though have referred to Bangalore Tribunal decision in the case of Wings Group of Cos 2008 (12) STR 287 (Tri.-Bang.) but has not followed it in his order. He further submits that even the subvention of interest granted by HDFC Bank was wrongly added to gross value of appellant services. The adjudicating authority has not appreciated that doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and taxability thereof the issue is settled in the following judgment:- (i) Brij Motors Pvt. Ltd. Vs. CCE, Kanpur 2012 (25) STR 489 (Tri. Del.) (ii) CCE, Jaipur Vs. Chambal Motors (P) Ltd. 2008 (9) STR 275 (Tri.- Del.) (iii) CCE, Indore Vs. Oracle Financial Services 2013 (31) STR 337 (Tri.-Del.) Therefore the Service Tax liability is correctly confirmed. 4. We have carefully considered the submissions made by both sides and perused the records. We find that the appellant made submissions on merit as well as limitation strongly, we are of the view that the case can be decided on limitation without going into merit of the case. The appellant was engaged in providing services to the HDFC Bank in regard to promotion of loan of the bank against which they received the commission/incentive. As regard the limitation, we find that there was reasonable confusion about the category of service whether the said service of the appellant falls under Business Auxiliary Services or Business Support Services . The issue has been dealt by Board in the Circular no. 87/05/2006-ST dated 06.11.2006, wherein it was clarified that the service provided by HDFC Bank is cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 stated that he was given to understand that service tax is not applicable for the nature of business that he is doing. Service rende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 only of academic importance as we have set aside the demand on account of time bar. In view of this we are not dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice 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 to be paid on such commission categorizing the activity of the Appellants as business auxiliary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facturer 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 Tribunal s 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 defined in Section 65(19) and enumerated to be a taxable service in Section 65(105)(zzb), was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent 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 redetermination 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. Circular No. 87/05/2006-S.T., dated 6-11-2006 Authorised motor vehicle dealers and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore 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-S.T., 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 concern in relation to the business auxiliary service, insofar as it relates to, - (a) procurem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pass following order : (a) Demand from July, 2003 to March, 2005 in respect of Business Auxiliary Services (service relate to HDFC bank) is set aside being time bar. (b) Service tax demand for April and May-2005 require to be re-quantified as per our above discussion by the Adjudicating Authority. (c) As regard the demand of ₹ 1,42,114/- relates to Business Auxiliary Service (Commission on sale of car) require to be re-considered applying the Notification No. 14/2004-S.T. by the Adjudicating Authority. (d) Penalties imposed under Sections 76, 77 and 78 are set aside. 7. Appeal is partly allowed in the above terms. 5. From the above judgment it can be observed that the nature of service, transaction and facts are absolutely identical to the present case, therefore the ratio of the above judgment is directly applicable in the present case. In the present case the period involved is 10.07.2003 to 31.03.2006, whereas the show-cause notice was issued on 08.10.2007 i.e. after stipulated normal period of one year, therefore the entire demand is hit by limitation. As per our above discussion the demand is not sustainable on the ground of time ..... 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