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2015 (2) TMI 46 - AT - Service TaxWaiver of pre deposit - Classification of service - Business Auxiliary service or Banking and Financial service - appellants were engaged in verifying the personal as well as financial details of prospective/potential customers, conducting field investigation and providing a report of its field investigation to the Bank within the time frame as well as in the form prescribed by the Bank - Held that:- activities undertaken by the appellants do not come under any of the categories specified in the services. Learned AR submitted that appellants are engaged in promotion or marketing of the products of M/s. Kotak Mahindra Bank. We are not convinced by this submission. If the Bank requires the appellant to verify and report on the financial position of the prospective/potential customer identified by the Bank and got the report within the time frame/format, it cannot be said that the appellant is marketing/promoting the business of the Bank. Therefore, prima facie, we find that the Service Tax cannot be demanded under BAS. As regards the services to ICICI Bank on which a portion of the demand has been made, we find that the appellants provide service in relation to collection or recovery of cheques/payments/instalments from the borrowers of the loans; field investigation of the customers pertaining to the personal as well as financial details of prospective customers of Bank. Revenue has taken a view that this amounts to provision of service of recovery agent. According to the definition of collection agent/recovery agent, taxable services means any service provided or to be provided to a banking company or a financial institution including a non-banking/financial company or any other body, corporate or a firm, by any person, in relation to recovery of any sums due to such banking company or financial institutions etc. in any manner. We find that a portion of the services rendered is definitely covered by the definition. Both sides could not quantify the exact amount of tax attributable to this service. But roughly, it was agreed that the amount can be around ₹ 3 lakhs. Having regard to the facts and circumstances discussed above, in our opinion, appellant should deposit an amount of ₹ 3 lakhs (Rupees three lakhs only) towards Service Tax (principal) and ₹ 2 lakhs (Rupees two lakhs only) towards interest within eight weeks - partial stay granted.
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