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TMI Blog2012 (7) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 76 till 17.4.2006 and penalty of Rs.200/- per day thereafter for the period of default subject to the ceiling of 2% of the demand of tax under Section 76 holding the appellant had provided Business Auxiliary Service, it came in appeal to Tribunal. 2. In adjudication, the issue involved was as to whether the services rendered by TVS (appellant) to ICICI Bank, HDFC Bank and Oriental Insurance Company was in relation to promotion and marketing of services and such service taxable as Business Auxiliary Service under section 65 (zzb) read with Section 16 (19) of the Act (Ref: Para 19 of impugned order). Referral charges which was the consideration received by appellant from those banks for promoting and marketing their service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company. 3. Pleadings of the appellant were considered by ld. adjudicating authority to adjudicate the matter. The appellant submitted before that authority that there was no promotion or marketing of service provided to the banks nor to the insurance company and receipt of publicity expenses incurred was towards joint promotion of advertisement which was not liable to service tax. The authority examined the agreement between the appellant and aforesaid banks as well as insurance company along with evidence and modus operandi of the appellant and came to the conclusion that role of the appellant was to promote and market the service provided by the banks as well as insurance company making advertisement for them and providing them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ability, cum tax benefit is also admissible. The appellant having been discharging its tax liability regularly, adjudication proceedings should not have been initiated and under Section 73 (3) of the Act and no notice should have been issued. 5. Per contra, ld. JCDR reiterated the grounds of appeal to support the case of the Revenue. 6. Heard both sides and perused the records including the respective parts of the adjudication order as well as the agreement to which attention was drawn in the course of hearing. 7. The SCN dt. 2.4.2008 indicates that an amount of Rs.3,88,19,999/- was received by appellant as referral fees by it which was disclosed as miscellaneous income in its Profit& Loss Account for the financial y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of prospective buyers promoted marketing of insurance service by the said insurance company. The vehicles sold by the appellants were insured by Oriental insurance and expeditious settlement of the claims, if any, made by the customers were agreed to be attended by that insurance company in terms of such agreement. Such a facility was also provided at the doorstep of dealers and authorized service centres of appellant providing infrastructural facility bringing live link between the appellant and the insurance company to serve the object of promoting market for providing insurance service by the insurance company. It was also agreed between the appellant and the insurance company to use logo of the latter to hold out to the public through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of service of the bank by appellant. Monthly commission was paid to appellant by bank in terms of the agreement from time to time except in case of customers identified by the bank and its agents directly. It was thus a proved case of promotion and marketing of services of bank by appellant. Similarly, the agreement dt. 9.5.2003 entered into by the appellant with HDFC Bank Ltd. (Page 29-46 of the Paper Book) under the title Preferred Financier Agreement was also in the same terms as that of the ICICI Bank and that has also resulted in promotion and marketing of banking and financial service of that bank by the appellant. 10. The MOU dt. 22.3.2004 made by the appellant with Oriental Insurance Co. brought out their association at p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by appellant to the insurance company. The service so provided by the appellant was input service intended to be used by bank and insurance company to provide their output services. 11. Aforesaid modus operandi followed by the appellant proved that it was promoter and marketer of services of banks as well as insurance company, and was auxiliary in the chain of economic activity carried on by them. It has accordingly provided Business Auxiliary Service to the banks as well as insurance company for which adjudication was rightly made. 12. Facts and evidence aforesaid when tested on the touch stone of Section 65 (105) (zzb) read with Section 65 (19) of the Act that warrants taxation of the consideration received by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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