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TMI Blog2023 (6) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... , as defined in section 65(19) of Finance Act, 1994, is predicated upon rendering of service on behalf of client who becomes obliged to recompense provider of the service and absence of even one element in the intermeshed transaction precludes coverage thereunder. That the appellant undertakes any warranty-related handling of vehicles at the instance of M/s Maruti Udyog Ltd will not, of itself, establish that taxable service under section 65(105)(zzb) of Finance Act, 1994 had been rendered. Hon ble Supreme Court in COMMISSIONER OF CGST AND CENTRAL EXCISE VERSUS M/S EDELWEISS FINANCIAL SERVICES LTD. [ 2023 (4) TMI 170 - SC ORDER] approved that a transaction involving the purchaser of car, as recipient of extended warranty , making pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h service. There is also no evidence of ostensible arrangement of appellant with the insurance company or of any direct payment to the appellant for sale of such policies. That M/s Maruti Udyog Limited, who may have had an arrangement with the insurance company and chose to part with some of the commission received therefrom to dealers, did incentivize sale of policies by the appellant does not, in the absence of contractual agreement between insurer and dealer, justify the finding of taxable service , envisaged by section 65(105)(zzb) of Finance Act, 1994, having been rendered. All the three components of the demand, as upheld by first appellate authority, suffers from infirmity of not being consistent with definition of taxable servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of cars during the period in dispute; while confirming the demand for having rendered business auxiliary service , ₹ 4,81,477/- was appropriated even as penalties were imposed under section 76, 77 and 78 of Finance Act, 1994. 3. The first appellate authority allowed the plea of the assessee that commission received for facilitating financial institutions at their premises was beyond the ambit of taxability and, by invoking section 80 of Finance Act, 1994, set aside the penalty under section 76 of Finance Act, 1994. Aggrieved by the upholding of demand of ₹ 3,17,161/- on the other three activities incorporated in the show cause notice, the appellant is before us. 4. Learned Counsel for the appellant submits that the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd vs. Commissioner of Service Tax Central Excise, Mumbai II V [2017 (52) STR 299 (Tri.-Mumbai)] and in Arpanna Automotive Pvt Ltd vs. Commissioner of Customs Central Excise [2016 (43) STR 397 (Tri.-Mumbai)] . On the chargeability of tax on insurance commission , it was pointed out by Learned Counsel that this would, in many ways, be identical to the commission disbursed for securing finance facility and that, if at all, taxability for rendering support service for business or commerce may have accorded some semblance of credibility to the show cause notice. It was also argued that. with invoking of section 80 of Finance Act, 1994, imposition of penalty under section 78 of Finance Act, 1994 is bereft of legality. 6. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order no. A/85986/2022 dated 16th February 2022] of the Tribunal in Commissioner of CGST Central Excise v. Edelweiss Financial Services, in disposing off appeal [appeal no. ST/87134/2018] against order [order-in-original no. ME/COMM/KCG/13/2017-18 dated 27th October 2017] of Principal Commissioner of GST Central Tax, Mumbai East, holding that consideration is sine qua non for taxing, and which found approval of Hon ble Supreme Court in Commissioner of CGST and Central Excise v. Edelweiss Financial Services Ltd [order dated 17th March 2023 in civil appeal diary no. 5258/2023] , a transaction involving the purchaser of car, as recipient of extended warranty , making payment to the principal of the appellant without any part thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted as extra charges for RTO registration is not covered under support services of business and commerce . 8. In view of the foregoing, the Service Tax liability confirmed under Business Auxiliary Service for the amount of RTO registration fees is set aside. As regards the penalty imposable, we find the Service Tax liability of the amounts received from the various financial institutions, whether is taxable otherwise was settled by the Larger Bench, there were two different streams of the decisions contradicting each other. As the issue needs to be settled by the Larger Bench, the appellant having discharged Service Tax liability and interest thereon, this is a fit case for invoking Section 80 of the Finance Act, 1994 to set aside pe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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