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2015 (12) TMI 75 - CESTAT BANGALOREDemand of service tax - BAS - Collection of EMI on behalf of bank - whether when the appellants sold the loan portfolio and collected the EMI amount and gave an assurance that they would be collecting the EMI, the appellants are liable to pay Service Tax on the discount given by the appellants to the bank at the rate of 10% of the sale consideration received by the appellant from the banks - Held that:- in this case both bank as well as the assessee have not recorded anything as to the cost attributable to the collection of EMI in the agreement. It is also not possible to quantify what is the amount spent by the appellants for collecting the EMI. In our opinion 10% fixed by the Commissioner for arriving at the cost of collection of EMI is arbitrary and cannot be sustainable. At the same time we are unable to agree with the submission that appellant is not liable to pay any Service Tax towards the cost of collecting of EMI on the ground that there is no such cost at all. In our opinion when EMI is collected by the appellant from the borrower, it amounts to providing business auxiliary services to the banks and therefore appellant’s contention that there is no service at all and no cost has been collected by them towards collecting EMI cannot be accepted. Matter remanded back for quantification of demand with the help of professional cost accountant - Decided partly in favour of assessee.
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