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2023 (3) TMI 574 - AT - Service TaxLiability to pay service tax for the period post 01.07.2003 - franchise service was provided post its enactment i.e on 01.07.2003, and prior to that date, but the contract for the franchise service and payment therefore, was made prior to 01.07.2003 - whether the appellant’s demand under commission service is time barred when the service of commission provided by giving table space to the finance company for sale of their finance product? HELD THAT:- The fact which is not under dispute is that the appellant have entered into a contract of franchise agreement before 01.07.2003. and the payment of such contract was also made at the time of entering into the contract. In this fact the Hon’ble Rajasthan High Court in [[2018 (3) TMI 1288 - RAJASTHAN HIGH COURT]] has decided the matter holding that when the contract was entered and payment thereof was made at a subsequent stage if the service was brought under the levy of service tax, the appellant is not liable to pay the service tax, for the reason that the the provision of services shall be treated as provided on the date of contract on payment of service value - it is settled that in respect of Franchise Service the service tax will arise as per the date of contract and date of payment for the service and if the same is at a time when there is no levy, no service tax can be charged. Accordingly, in the present case also the service tax on franchise service is not chargeable. Levy of service tax - Business Auxiliary Service under the head of commission - HELD THAT:- The issue was not free from doubt and this Tribunal in the case of SILICON HONDA VERSUS COMMISSIONER OF C. EX. (APPEALS-II), BANGALORE [2007 (4) TMI 27 - CESTAT, BANGALORE], & TRIBHUVAN MOTORS LTD. VERSUS COMMISSIONER OF SERVICE TAX, MANGALORE [2009 (5) TMI 382 - CESTAT, BANGALORE] held in favour of the assessee that mere providing the table space to the financial institutions, it is not taxable. However, the issue was subsequently referred to the larger bench and in the case of M/S PAGARIYA AUTO CENTER VERSUS CCE, AURANGABAD [2014 (2) TMI 98 - CESTAT NEW DELHI (LB)], It was held that the commissioner received from the financial institution shall be liable to service tax. Extended period of limitation - suppression of facts - HELD THAT:- The suppression of fact cannot be alleged against the appellant. Therefore, the demand being covered under the extended period will not sustain as the same is hit by limitation. Appeal allowed.
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