TMI Blog2014 (3) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... liability to service tax on the consideration/charges received by it from its customers, i.e. on pre-closure of loans. Since Revenue concedes the position that the transactions in issue do not amount to business auxiliary service and since there is no allegation of the appellant having provided any other taxable service, we fail to comprehend this contention and as to how the appellant’s presumed knowledge of its tax liability on fore-closure charges received, would render it liable to service tax, for being provided Business Auxiliary Service, which is admittedly inapplicable - Decided in favour of assessee. - Appeal No. ST/216/2012 - Final Order No. 50810/2014 - Dated:- 27-2-2014 - Mr. G. Raghuram and Mr. Rakesh Kumar, JJ. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) and (3) of the Show Cause Notice the clear and unambiguous allegation is of having provided business auxiliary service. No other service is alleged to have been provided. In paragraph (5) of the Show Cause Notice, it is stated that the appellant is registered with the National Housing Bank to carry on the business of Housing Finance; that the National Housing Bank is remitting service tax on pre-payment charges collected from the appellant; and that the appellant is availing Cenvat credit on the service tax component remitted by it to the National Housing Bank. 4. Pursuant to the Show Cause Notice and after a due process, proceedings culminated in the adjudication order. It requires to be recorded that in response to the Show Cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be a taxable service, is a contention that was reiterated in the appellant s letter dated 18.8.2009 addressed to the Supdt. Service Tax, Range-II, Jaipur, as well. 6. The primary authority however, confirmed the proposed levy of service tax, interest and penalty without any finding as to what taxable service the levy is confirmed for. 7. Aggrieved, the appellant preferred an appeal which was disposed of by the appellate Commissioner on 8.7.2011. Discussions and findings of the appellate Commissioner are set out in para 9 of the appellate order. In paragraph 9.2 the appellate authority records the consistent plea of the appellant, that it had not provided the taxable business auxiliary service. The Commissioner (Appeals) how ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he facility of pre-closure of a loan may fall within the ambit of Banking and Financial Services as defined in Section 65(105)(zm) read with Section 65(12). By the Finance Act, 2004 clause (viii) was introduced in Section 65(12) of the Act incorporating other financial services viz. lending etc. also within the ambit of Banking and other Financial Services. As the consideration received by the appellant from its customers towards fee is for providing the facility of pre-closure of loans this activity may fall within the generic ambit of lending, as defined Banking and other Financial Services. The consideration received therefor may therefore constitute the consideration received for providing a taxable service. 10. Counsel for the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the charge and the appropriate provision of law under which the alleged liability of an assessee, is alleged to have arisen. These to fundamental attributes and non-derogable indicia of a valid Show Cause Notice. The law is also well settled that failure of natural justice at the primary level cannot be cured by affording due process at the appellate stage. Since the Show Cause Notice dated 23.10.2009 has clearly and unambiguously alleged the appellant provided only business auxiliary service (in paragraph 2 and 3), no conclusion could be recorded either at the primary or the appellate proceedings, that the transactions in issue are classifiable as Banking or other Financial Services. In fact neither the primary nor the appellate Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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