TMI Blog2009 (9) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ax is leviable only on the taxable value realized. A major portion of the taxable value is on account of interest charge realized which in any case could not have validly formed part of taxable value since interest on loan was not taxable as per Section 67 of the Act as it existed at the material time - We also find force in the submission by the learned Counsel that commission received as insurance agent is not liable to service tax - In the light of the clarification issued by Ministry in its letter F. No. B.11/1/2002-TRU, dated 1-8-2002 stated supra, the claim of the appellants that the commission received on sale of consumer durables and two wheelers was exempted during the material period also deserves to be considered since the mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... APTPC had collected interest on service charge from employees of various government departments who purchased vehicles and consumer durables which APTPC had financed. It had also collected commission on sale of such goods. After due process, the Commissioner found that APTPC had received an amount of Rs. 9,50,50,011/- towards finance/interest charges, service charges, documentation charges and an amount of Rs. 20,18,254/- towards commission. In the material period, the appellants had declared only Rs. 29,12,971/- as receipt against provision of taxable service. The Commissioner demanded service tax of Rs. 85,93,155/- under Section 73(2) of Finance Act, 1994 (the Act) along with applicable interest under Section 75 of the Act. Penalty was im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of Rs. 20,18,254/- for the material period, therefore, was not sustainable. The impugned order confirmed demand of service tax on the entire service charge reflected in the annual accounts. These charges included all the revenue of the Corporation. The appellants had engaged in provision of insurance to engineering students in the State of Andhra Pradesh on behalf of M/s. United India Insurance Company. As the commission received by the appellants from, the Insurance Company for marketing their insurance policy fell under "Insurance Auxiliary Services (Concerning General and Life Insurance Business)" of Section 65(105)(zl) of Chapter V of the Act, the tax was liable to be paid by Insurance Company; the demand on the appellants was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds taken in the appeal. He relied on the following decisions of the Tribunal and claimed that APTPC was involved in the business of hire purchase finance which was not covered by Section 65(105) of the Act and therefore, the demand of service tax for the activity of providing hire purchase finance was not sustainable. (i) Bajaj Auto Finance Ltd. [2007 (7) S.T.R. 423 (Tri.-Mumbai)] In this decision, the Tribunal has held that hire purchase finance in which the appellants were engaged was different from hire purchase and that hire purchase finance was not covered under the provisions of Section 65(105) of the Act and vacated the demand of service tax confirmed in respect of business of hire purchase finance. (ii) Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the State of Andhra Pradesh. The service involved was classifiable under Insurance Auxiliary Service' under Section 65(105) (zl) of the Act. The Ministry had clarified vide letter F. No. B.11/1/2002-TRU, dated 1-8-2002 that in respect of service involved, the Insurance Company was liable to pay service tax and not the insurance agent like the appellant. As regards the services provided by the appellants as commission agent, Notification No. 13/2003, dated 26-6-2003 exempted the said services from service tax liability. They had rendered service classifiable under this category during the period prior to 7-6-2005 when the said exemption was withdrawn under the Notification No. 19/2005-S.T., dated 7-6-2005. Therefore demand of Rs.20,18,254 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxable value since interest on loan was not taxable as per Section 67 of the Act as it existed at the material time. We also find force in the submission by the learned Counsel that commission received by APTPC as insurance agent is not liable to service tax. In the light of the clarification issued by Ministry in its letter dated 1-8-2002 stated supra, the claim of the appellants that the commission received on sale of consumer durables and two wheelers was exempted during the material period also deserves to be considered since the material period is prior to 7-6-2005 when the exemption to Business Auxiliary Service relating to sale or purchase of goods was withdrawn. In fine, we find that the impugned order has confirmed demand without ..... X X X X Extracts X X X X X X X X Extracts X X X X
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