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TMI Blog2024 (6) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... o occasion for imposition of penalties. There have been several decisions of this Tribunal and even of the Hon ble High Court, wherein it has been held that once the entire proposed payment was made along with the interest prior to the issue of show cause notices and application intimating the said payment has also been filed, there remains no question to impose any penalty - the demand arising have been wrongly confirmed. Levy of service tax - Business Auxiliary Services - incentive received, extension warranty commission - unclaimed creditors written off - HELD THAT:- The apparent fact on record is that the appellants are interested in selling their cars and the respective accessories. The buyers who are interested in buying their cars, if need loan prior the said purchase, they have been referred to the financial institutes. From this admitted factual aspect, to our opinion, it is clear that the appellants actually are promoting their own business by facilitating their customers to avail loan. The clients of the appellants are the said customers. For want of any arrangement between the financial institutes and the appellants, those institutes cannot be called as the service reci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable services under the category of Repair, Reconditioning, restoration or Decoration or any other similar services of motor vehicles. After the scrutiny of records of the appellants including ST-3 Returns and GAR-7 challans for the year 2010-11 to 2014-15, the department observed short payment/non-payment of service tax. Resultantly, following six Spot Memos dated 09.12.2015 were issued to the appellant: (i) Service tax amounting to Rs.11,468/- was observed to be short paid service tax for the month of September 2014. (ii) The appellant had shown certain income under the head of rent received from Garima Arcade in their balance sheet for the Financial Year 2010-11, 2011-12 and 2012-13 alleging the amount towards rendering the renting of immovable property service that an amount of Rs.21,478/- was found not paid. (iii) The appellant was observed liable to pay service tax under Reverse Charge Mechanism w.e.f. 01.07.2012 pursuant to Notification No.30/2012-ST dated 20.06.2012. However, the amount of Rs.69,887/- was found not paid by the appellant. (iv) The income in the balance sheet was shown from incentive received, extension warranty commission and unclaimed creditors written ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing demand with respect to five of these spot memos is alleged as void ab intio. With respect to Spot Memo no. 4, it is submitted that the incentive was given by the finance companies without any assistance given to the finance companies by the appellant. Mere act of providing information to buyers about availability of loan and directing the buyers to reach before the financial institution is not sufficient to invoke the title of Business Auxiliary Service . Learned counsel has relied upon the following decisions: (i) Tribhuvan Motors Limited Vs. CSE, Mangalore reported as 2010 (17) STR 281 (Tri-Bang.) (ii) Jaika Motors Limited Vs. CCE, Nagpur reported as 2014 (35) STR 417 (Tri.-Mumbai) 3.1 Pertinently, the appellant s relationship with the finance companies is already within Revenue s knowledge. This is borne out of appellant s letter dated 08.12.2008 in response of Revenue s letter C.No. ST/R-1/GWL/DraftReviewIR/BAS/07-08/1618 dated 21.11.2008. It is submitted that adjudicating authority in the impugned order has misplaced its reliance on Commissioner of Service Tax, Mumbai Vs. Jaybharat Automobiles Limited reported as 2016 (41) STR 311 (Tri.-Mumbai) and Rennaissance Leasing Fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid: Provided that the Central Excise Officer may determine the amount of short payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of thirty months referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation 1- For the removal of doubts, it is hereby declared that the interest under section 75 shall be payable on the amount paid by the person under this sub-section and also on the amount of short payment of service tax or erroneously refunded service tax, if any, as may be determined by the Central Excise Officer, but for this s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umstances. The said findings are contrary to the facts apparent on record and the statutory mandate of the said provision. Resultantly, the demand arising out the aforementioned five spot memos is held to have been wrongly confirmed. Even the show cause notice is held to be void ab initio with respect to these five spot memos. 9. Coming to the demand mentioned under spot memo no. 4 for an amount of Rs.3,06,099/- as received towards incentive received, extension warranty commission and unclaimed creditors written off . Department has alleged this amount to be an amount towards rendering Business Auxiliary Services . The order under challenge has confirmed the said demand holding that the amount given by the finance companies to the appellant is not a donation or charity without any quid pro quo, it is on account of referring the customers to the financial institution and the amount in question is a commission against the said reference. The reference is nothing but the promotion of the business of financial companies and as such the amount in question is received for rendering Business Auxiliary Services. The decision of Commissioner of Service Tax, Mumbai Vs. Jaybharat Automobiles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the definition of BAS, spelt out in Section 65(19), then it would be legitimate to conclude that BAS is provided. 11. As already observed above, there is no evidence produced by the department either in the form of an agreement or in form of any guidelines from the bank or the financial institutes for the basis of giving commission to the appellants, we hold that appellants were not rendering Business Auxiliary Services to the financial institutes/banks. 12. With respect to the amount shown as unclaimed creditors written off , it is apparent from the appellant s submission that some amount against the sale of accessories to the buyers remains in the account of appellant which is not returned to the customers. The said amount, after certain period of time is recorded as written off in the appellant s record. From no stretch of imagination, the amount received from sale of accessories can be alleged to be an amount towards rendering any kind of service. With these observations, we hold that the demand raised by Spot Memo No.4 for an amount of Rs.3,06,099/- along with the interest has wrongly been confirmed. There is no reason even for imposition of penalty. 13. Coming to the fina ..... X X X X Extracts X X X X X X X X Extracts X X X X
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