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M/s. Y.M. Motors Pvt. Ltd. Versus Commissioner of Central Excise, Pune-I

2015 (11) TMI 523 - CESTAT MUMBAI

Business auxiliary services - service tax on the commission received from banks and insurance company - Penalty u/s 77 & 78 - Held that:- As regard services of motor vehicle, appellant have been collecting service tax alongwith service charges and was not paying to the Government exchequer. When appellant was collecting service tax, they were well aware of the taxability of the service and for that reason only they were collecting service tax and retaining with them. I am of the view that appell .....

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xability of the said services was not free from doubt, therefore the appellant in respect of these two services shown reasonable cause for waiver of penalty imposed under Section 77 and 78. Penalty of 25% of the service tax amount of ₹ 10,67,854/- and drop penalty imposed under Section 78 in respect of service tax paid on commission from bank/insurance company and handling charges of RTO. Penalty imposed under Section 77 for ₹ 10,000/- shall stand reduced to ₹ 5,000 - Decided p .....

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ed the appeal of the appellant. 2. The fact of the present case is that the appellant M/s. Y.M. Motors Pvt. Ltd are registered for providing Business Auxiliary Services and Authorized Service Station services. The appellant were not paying service tax on the commission received from banks and insurance company which was considering as taxable services under the category of business auxiliary services. It was further observed that they were recovering certain amount from the customer for RTO regi .....

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of ₹ 10,67,854/- under the category of authorized service station services, service tax of ₹ 2,57,172/- under the category of business auxiliary service towards amount of commission received from the banks/insurance company and service tax of ₹ 2,40,752/- under the category of business support service towards amount received under registration charges or handling charges. Since the amount was already paid alongwith interest it was proposed to be appropriated against the above d .....

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in toto. 3. Shri. S.P. Sheth, Ld. Counsel for the appellant at the out set submits that the appellant is not contesting the demand of service tax and interest, which has already been paid and he made submission only to waive the penalty of ₹ 10,000/- imposed under Section 77 and penalty of ₹ 15,65,778/- imposed under Section 78 of the Finance Act, 1994. He submits that since the appellant has paid entire service tax and interest before issuance of show cause notice and also paid the .....

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comply service tax payment in time. As regard the service tax liability on commission of bank and insurance company and service charged for RTO registration of vehicle, he submits that both the issues are highly contentious and matter was under litigation and involved interpretation of law of taxability of the said services. Therefore in respect of these services non payment of service tax at relevant time should not be construe as suppression of facts on the part of the appellant. Therefore pe .....

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section 73(3), also no SCN and adjudication was required to be done, therefore penalties also should not have been imposed. 4. Shri. B. Kumar Iyer, Ld. Superintendent (A.R.) appearing on behalf of the Revenue reiterates the finding of the impugned order. He further submits that as regard the service tax on the authorized station service, the appellant collected service tax and not deposited to the Government exchequer, therefore submission of the Ld. Counsel that they are in the stage of newly s .....

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insurance service and handling charges i.e service charges for getting vehicle registered with the RTO, it is his submission that, since the appellant has admittedly discharged service tax liability in respect of services also, the appellant also well aware of the taxability of the services, therefore they have knowingly not paid the service tax before pointing out by the departmental officers. In these circumstances appellant is not entitled for the any relief from the penalty imposed by the or .....

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