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TMI Blog2019 (2) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... loan rests with the Bank. This being so, it is not a service provided to the dealer, and the Bank is never a Commission Agent of the dealer - It is clear that the assessee is neither acting on behalf of dealer nor providing any service to dealer. Therefore, the assessee definitely does not fit into the category of Commission Agent or under the definition of BAS. The discount received by the assessee cannot be considered as a consideration for service. The activity, if any, does not fall under the definition of BAS. Time limitation - Held that:- Since the issue on merits is found to be in favour of the assessee, it is not necessary to consider the issue on limitation. Appeal allowed - decided in favor of appellant. - Appeal Nos.: ST/00470/2009, ST/41507/2013, ST/40987/2015 - Final Order Nos. 40178-40180/2019 - Dated:- 29-1-2019 - Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri. V. S. Manoj, Advocate for the Appellant Shri. A. Cletus, ADC (AR) [Sl. No. 1], Shri. B. Balamurugan, AC (AR) [Sl. Nos. 2 3] for the Respondent ORDER Per Bench : The issue involved in all these appeals being the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of the appellant is only disbursement of loan. The loan amount is given by issuing a cheque to the dealer. This is done only to ensure that the amount is not used by the borrower for any other purpose. This ensures recovery of the loan since the vehicle is regarded as the security of the loan. 4.2 Though the assessee receives some amount from the dealer, the same cannot be construed as a commission received for promoting the business of the dealer so as to fall under Business Auxiliary Services. The dealer is not a client of the assessee/Bank and instead, it is the borrower who is the client of the assessee/Bank. There is no service provider-client relationship between the assessee and the dealer. Therefore, the commission received does not have the character of consideration, as envisaged in the Finance Act, 1994. 4.3 The Show Cause Notice has been issued alleging that the appellant is engaged in promotion of the business of the dealer. However, the Original Authority has confirmed the demand holding that the appellant has acted as a Commission Agent. This finding is beyond the allegations raised in the Show Cause Notice and therefore, cannot sustain. 4.4 The other al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee promotes the business of the dealer. Such discount offered is in the nature of a commission for promotion, marketing and selling of the goods of the client viz., Dealer and thus falls within the definition of BAS. 5.2 Shri. A. Cletus referred to an example with regard to the tie-up that Engineering Colleges have with companies for the purpose of placement for students. These Engineering Colleges pay an amount to the HR Department of the companies. The loan amount can be considered as a commission received by the companies. In the same way, the Bank cuts (retains) the commission while issuing the cheque and this is the commission paid by the dealer to the assessee/Bank. As per the definition of BAS, activity of Commission Agent is also included. The commission is received from the dealer whose business is promoted by the assessee. Therefore, the demand has been rightly confirmed by the adjudicating authority. It is also argued that the Commissioner (Appeals) has wrongly set aside the demand, interest and penalties in Order-in-Appeal No. 148/2013. 5.3 With regard to the issue of limitation, it is argued by the Department that the assessee did not declare the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be said that the same is a consideration for service rendered. Every flow of money does not have the character of consideration. For rendering a service, there should be a relationship in the nature of service provider and service recipient. Further, the said service should fall within the category of BAS. For better appreciation, the definition of Business Auxiliary Services (BAS) as contained in Section 65(19) is reproduced as under : SECTION [65. Definitions. - In this Chapter, unless the context otherwise requires, - . . . [(19) business auxiliary service means any service in relation to, - (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client; or [ * * * * ] (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or [Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, inputs means all goods or services intended for use by the client;] [(v) production ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resent case, undisputedly, is not acting on behalf of the vehicle dealer for the purchase or sale of vehicles. Merely because vehicle is intended to be purchased from the dealer, the Bank would not disburse the loan. The Bank has to be satisfied with other conditions like executing hypothecation agreement, etc. The ultimate decision to give loan rests with the Bank. This being so, it is not a service provided to the dealer, and the Bank is never a Commission Agent of the dealer. It is clear that the assessee is neither acting on behalf of dealer nor providing any service to dealer. Therefore, the assessee definitely does not fit into the category of Commission Agent or under the definition of BAS. 12.1 While analysing the activity of the appellant, we also take note of similar situations. It is ordinary for Consumer Stores such as Home appliance dealers to arrange loan facilities to the customer by having a tie-up with financers/Banks. Whenever a customer approaches a Home appliance store to purchase any good like washing machine, refrigerator, etc., in case he intends to avail a loan for such purchase, the store may inform him that it would be easy for him to get loan from a pa ..... 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