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2012 (5) TMI 444 - AT - Service TaxBusiness Auxiliary Service (BAS) - Service provided to bank in relation to loan - arranging documents for the bank to evaluate creditability, eligibility and financial status of the prospective customer for funding by the bank. - held that:- Appellant promoted funding business of bank gathering documents and preparing profiles to enable the bank to consider its funding activity. All these facts and attendant circumstances bring the bank and the Appellant to the understanding as taxable service provider and recipient of such service. - Appellant provided 'Business Auxiliary Service' to the bank liable to tax. Extended period of limitation - Show Cause Notice issued on 22.8.2006 for the period from 1.7.2003 to 31.3.2005 – Held that:- In the present case, limitation can be reckoned from the date of knowledge of the department on 20.1.2005 giving rise to cause of action. Adjudication is not time-barred. - Decision of Apex Court in CCE, Visakhapatnam Vs. Mehta & Co. (2011 (2) TMI 2 (SC)), followed. Whether amendment made by Finance Act 2004 coming into force with effect from 10.9.2004 read with Notification No.14/2004 dated 10.9.2004 granted immunity to the Appellant from levy – Held that:- service provided by the Appellant in the present case was to the financing bank but not to the borrower. Relation between the Appellant and the bank proves that there was quid pro quo between the Appellant and the bank to meet the requirement of funding. The Appellant had only served the bank but not acted on behalf of the bank. Borrower was not privy to the contract between the Appellant and the bank. So also in absence of any letter of appointment and agreement. Appellant has no scope to be benefited by the amendment of law. Penalty - held that:- But while appreciating the levy was new imposition of penalty under Section 78 and 76 of the Act, simultaneously shall be harsh. Therefore levy of penalty under Section 78 shall be proper dose to prevent the Appellant from recurrence of the contravention of law and to cause loss of revenue.
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