2008 (1) TMI 102 - AT - Service Tax

Appellants had agreement with Bank to promote their retail activities there is no force in contention of appellants that they are not providing any business auxiliary service and they are under the franchise agreement with Bank - conditions of the agreement shows that appellants has to promote retail finance of bank - appellants are not paying to bank any amount being their franchise - even they are getting commission from bank impugned services coverable under business auxiliary service

Summary

The Appellate Tribunal CESTAT, New Delhi dismissed the appeal against the demand of service tax and penalties imposed on the appellants for providing business auxiliary services to ICICI Bank. The tribunal found that the terms of the agreement required the promotion of retail finance, thus constituting business auxiliary services. The appeal was dismissed as the appellants were receiving commission for their services and not paying any franchise fee to the bank.