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2016 (11) TMI 19 - AT - Service TaxLevy of tax - services of ‘Promotion and Marketing’ of Car Loan and Personal Loan - Direct Sales Agent - whether the services will fall under the head Business Auxiliary services, which have been introduced from 1/7/2003 and the tax to be levied on the said service? - Held that: - decision in the case of Bridgestone Financial Services Vs. Commr of S.T. Bangalore [2007 (1) TMI 67 - CESTAT, BANGALORE] followed as well as Board Circular dated 16/11/2006 relied upon where it has been settled that service provided by the appellant to HDFC bank is classifiable as Business Auxiliary Services and liable for service tax. Time bar - as per the confusion and doubt prevailing in respect of impugned service, the appellant entertained the bonafide belief that whethe any service provided to HDFC bank is classifiable under Business Auxiliary services or Business Support Services. As regard the Business Support Service it became taxable only from 1/5/2006, even there were some judgments wherein it was held that the identical services is of Business Support Service therefore it cannot be said that the appellant has intentionally avoided the payment of service tax. The issue was not free from doubt as even the board also realized and issued a circular dated 6/11/2006 by which it was clarified that the services in question will fall under the category of Business Auxiliary Services and thus it is taxable - due to interpretation of classification of services extended period cannot be invoked - It is settled law that where in the case, the issue involved is of interpretation of law, the extended period cannot be invoked. The period involved is July,2003 to May, 2005 whereas the show cause notice was issued on 29/5/2006. As per the discussion made herein above extended period cannot be invoked therefore service tax demand upto March 2005 is hit by limitation therefore demand pertaining to the period July, 2003 to March , 2005 deserves to be set aside. As regard the demand for the period April and May, 2005 in respect of services provided to HDFC bank towards promotion and marketing of loan under Business Auxiliary Services, the same requires re-quantification on the ground that Adjudicating authority has not conclusively established that what is the actual receipt of service charges by the appellant during the period April, 2005 and May, 2005. Sales commission on vehicle - N/N. 14/2004-ST dated 10/9/2004 - Held that: - the appellant is proprietary concern therefore they are prima facie eligible for above referred exemption notification as the services is covered under ‘provisions of services on behalf of client’ which is one of the services specified under the notification. However Ld. Adjudicating authority has not given any findings as regard the claim of this notification categorically made by the appellant before him - eligibility of this Notification should be re-considered by the Adjudicating authority - As regard the penalties imposed under Section 76, 77 and 78, we find that as per our above discussion on limitation, there is bonafide belief of the appellant for non payment of service tax, the appellant has been able to reasonable cause for invocation of Section 80 - the demand being time bar penalties under Section 76,77 and 78 require to be set aside invoking Section 80. Appeal disposed off - decided partly in favor of appellant.
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