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2013 (2) TMI 102 - CESTAT BANGALOREPenalty u/s 76 to 78 - Business Auxiliary Service - BAS clause (ii) of section 65(19) - Providing a service on behalf of the banks (clients) to the latter's customers and hence the activity was not taxable prior to 10.9.2004, the date on which "Provision of Service on behalf of the client" was enacted as a part of the definition of BAS under Section 65 (19) - Entire period of the dispute (1.7.2003 to 31.3.2012) Held that:- The terms and conditions of the relevant Agreements show that the appellant was, in fact, using their infrastructure, staff and expertise to market products of the Banks. In both the Agreements, the appellant was referred to as "Direct Sales Association/Agent". After a study of the functions assigned to the appellant under the Agreements, the name of the appellant to be befitting in the sense that the appellant was, in fact, selling products of the Bank. The products of the Banks were nothing but “Banking services”. Therefore, ex facie , the appellant was marketing the services provided by their clients, viz. banks. Therefore, their activities squarely fell within the ambit of "promotion or marketing of services provided by client" which function was a part of the definition of BAS since 1.7.2003. In favour of revenue Extended period of limitation - Penalty - Section 73 (1) - Section 80 - Extra-ordinary Taxpayer-Friendly Scheme” - The appellant was under believe that, on the basis of the terms and conditions of the Agreements, that their liability to pay service under BAS arose under clause (vi) of the definition - It is not in dispute that they got themselves registered with the department and paid service tax under BAS from 10.9.2004, the date on which clause (vi) became a part of the definition - Held that:- Circumstances there appears to be a valid ground for the appellant to claim the benefit of Section 80 ibid, where under, if reasonable cause for non-payment of tax was shown to exist, penal action could be averted. We are of the view that such reasonable cause existed in this case. Consequently the appellant can claim exoneration from penal liability. In favour of assessee
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