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TMI Blog2018 (7) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... to have access to a pool of new vehicle buyers who would obviously also need first time car insurance - appellants therefore promoted the business of HDFC Chubb and for which services they were given agreed upon payment for every car insured by HDFC Chubb. Also, the transactional documents and other evidences on record indicate a substantial activity falling within the contours of the definition of ‘Business Auxiliary Service’ in Section 65 (19) of the Finance Act, 1994. Penalty - Held that:- The issue per se was mired in confusion and litigation - appellants had a reasonable cause for their failure to discharge tax liability and must be given the benefit of doubt - penalty set aside. Appeal allowed in part. - Appeal No. ST/192, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealized by them on fresh policies issued by them for the first time to customers using the said customer data base, on the condition that such fee payable would not exceed 10% of the GWP. Department took the view that this activity of both the appellants are in the nature of promoting and marketing of insurance products and services provided by HDFC Chubb and would therefore fall under the category of Business Auxiliary Service (BAS) as in Section 65 (19) of the Finance Act, 1994. A show cause notice dt. 21.10.2008 was issued to Appellant-I proposing recovery of service tax amounting to ₹ 7,31,883/- with interest and imposition of penalties under various provisions of law. Another show cause notice dt. 28.1.2009 was issued to Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DFC v) Service not rendered as commission agent vi) Point No.6 of agreement clearly indicates that appellants were not promoting the services of HDFC Chubb : You shall not in any manner solicit or procure insurance business for or on behalf of HDFC Chubb. Further you shall not at any time hold yourself out to be a licensed insurance agent of HDFC Chubb during the terms of the agreement . vii Order-in-appeal has merely relied on Order-in-Original. viii. Para 12 of OIA, listing several activities as if performed by HMIL is contrary to facts as no such service is being rendered by HMIL except sharing customer database. Finding to that effect is on presumption. ix. Reliance is placed on Tribhuvan Motors Vs. CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e given agreed upon payment for every car insured by HDFC Chubb. 7. Ld. Advocate has placed reliance on Tribhuvan Motors 2010-TIOL-57- CESTAT to contend that payments received from financial institutions by authorized dealers of motor vehicles for space provided for business would not fall under BAS. Due to conflicting decisions on this issue, the matter had been referred to the Larger Bench of the Tribunal which, in Pagariaya Auto Centre Vs CCE Aurangabad 2014 (33) STR 506 (Tri.-LB), inter alia held that the identification of the transaction and its appropriate classification as the taxable Business Auxiliary Service (BAS) or otherwise must clearly depend upon a careful analysis of the relevant transactional documents. In the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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