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TMI Blog2018 (7) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... no case that the first respondent has no jurisdiction to initiate proceedings by issuing the show cause notice. The appellant has taken up a contention that the proceedings are barred by limitation. The issue regarding limitation is a mixed question of fact and law. In fact, the learned Senior Standing Counsel for the Revenue has produced materials in support of his contention that the show cause notice was issued within the period of limitation. It is for the adjudicating authority to decide this issue. The first respondent is the adjudicating authority. The appellant cannot be heard to say that the explanation would not be considered by the first respondent and an order on merits would not be passed. None of the ground taken by the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed instalments. This mode of mobilisation of funds is governed by the guidelines issued by the Reserve Bank of India from time to time. 4. The sale of the debtors (future receivables) have the sanction of the Reserve Bank of India. The original securities, hypothecated assets, etc., would continue to be in the original names. The appellant apart from sale of receivables to the bank through a Deed of Assignment also undertakes the responsibility of collecting payments from the debtors and for the said purpose, a separate agreement is entered into under the Service Agreement. The appellant undertakes to collect the debts from various borrowers and remit the same besides rendering certain other services to the Banks. The appellant is paid a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in the matter are pure question of fact which should be decided by the authority on merits. Feeling aggrieved, the appellant has come up with this intra court appeal. Summary of Submissions 9. The learned Senior Counsel for the appellant contended that the show cause notice proposes to levy service tax on the profits derived from sale of current assets namely receivables to banks by way of securitization transactions for the period 2011-12 to 2014-15 which is beyond jurisdiction both on the ground of limitation and on the ground that the transaction is one of sale, to which service tax would not apply. The learned Senior Counsel contended that the first respondent by issuing the show cause notice acted beyond its jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated Monthly Instalments to be received from the customers are pooled together and sold to a trust or assigned to a buyer. The appellant assigns / sells the future receivables to be received out of rural lending to banks as per the guidelines framed by the Reserve Bank of India relating to Priority Sector Lending. 13. The appellant had sold the future receivables and had sold or assigned directly to the buyers at a premium. These buyers are mostly banks. The Banks buy the future receivables from the appellant in order to fulfill the legal obligation casted upon them by the Reserve Bank of India to lend money to priority sector. The first respondent proceeded under the premise that the main consideration received by the appellant for secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t collection of Equated Monthly Instalments from the customers in addition to the 'Sell-down Servicing Fee' and the 'Excess Spread Income Sell-down' received by them. According to the respondents, the other consideration received by the appellant from the assignee after securitization is the 'Sell-down Servicing Fee' on a monthly basis. The appellant collects all the future receivables from the customers, maintains the Books of Account in respect of the assigned properties, implements the KYC norms to their customers, makes payment of receivables to the assignee etc., In order to render the aforesaid services, the appellant collects service charges from the assignee. It is the contention of the respondents that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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