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2019 (1) TMI 723 - AT - Service TaxDemand of Service Tax - Banking and Financial services - business auxiliary services - interest income from hire purchase/activities - commission received from Insurance Company for canvassing their policies - commission which they received from various vendors of the consumer durables, etc. - time limitation - penalty. Banking and Financial services - interest income from hire purchase/activities - Held that:- In this case as it is evident from the arrangement with the government employees and their offices, the ownership of the goods lies with the appellants and gets transferred to the employee only after he pays all the hire charges and thereafter pays a transfer fee of rupee one. Therefore, the activity undertaken by the appellant is clearly hire purchase and not hire purchase finance and is exigible to service tax during the relevant period - however, the service tax can be levied only on the hire purchase charges excluding the interest element for the period post 10.09.2004. For the period prior to 10.09.2004, the service tax is payable including the interest element. Banking and Financial services - commission received from Insurance Company for canvassing their policies - Held that:- The appellant received commission from the insurance companies for promoting their products and thus acted as their agent. Therefore this falls under the category of ‘insurance auxiliary service’ which was chargeable under reverse charge mechanism during the relevant period and the service tax has to be collected on it from the insurance company and not from the agent. Therefore, the demands on this count need to be dropped - demand set aside. Business auxiliary services - commission which they received from various vendors of the consumer durables, etc. - Held that:- Such commissions were exempted vide Notification No. 13/2003-ST until 09.07.2004 and service tax is chargeable thereafter along with interest. Time Limitation - Held that:- The appellants have not declared the value of the services to the department in their returns. Therefore they suppressed the value of taxable services from the department - the extended period of limitation can be invoked in this case. Penalties - Held that:- Cnsidering that the appellant is public sector undertaking, it is found that they may not have had a malafide intention of evade service tax. Hence invoking Section 80, the penalties imposed on the appellant is set aside. Appeal disposed off.
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