Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Addis Marketing Versus Commissioner of Central Excise, Mumbai

Levy of tax - services of ‘Promotion and Marketing’ of Car Loan and Personal Loan - Direct Sales Agent - whether the services will fall under the head Business Auxiliary services, which have been introduced from 1/7/2003 and the tax to be levied on the said service? - Held that: - decision in the case of Bridgestone Financial Services Vs. Commr of S.T. Bangalore [2007 (1) TMI 67 - CESTAT, BANGALORE] followed as well as Board Circular dated 16/11/2006 relied upon where it has been settled that se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t was held that the identical services is of Business Support Service therefore it cannot be said that the appellant has intentionally avoided the payment of service tax. The issue was not free from doubt as even the board also realized and issued a circular dated 6/11/2006 by which it was clarified that the services in question will fall under the category of Business Auxiliary Services and thus it is taxable - due to interpretation of classification of services extended period cannot be invoke .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the period April and May, 2005 in respect of services provided to HDFC bank towards promotion and marketing of loan under Business Auxiliary Services, the same requires re-quantification on the ground that Adjudicating authority has not conclusively established that what is the actual receipt of service charges by the appellant during the period April, 2005 and May, 2005. - Sales commission on vehicle - N/N. 14/2004-ST dated 10/9/2004 - Held that: - the appellant is proprietary concern there .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion 76, 77 and 78, we find that as per our above discussion on limitation, there is bonafide belief of the appellant for non payment of service tax, the appellant has been able to reasonable cause for invocation of Section 80 - the demand being time bar penalties under Section 76,77 and 78 require to be set aside invoking Section 80. - Appeal disposed off - decided partly in favor of appellant. - ST/566/11 - A/89996/16/STB - Dated:- 2-9-2016 - Mr Ramesh Nair, Member(Judicial) and Mr. C.J. M .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

al loan and were advertising and getting prospective customers for the bank for which they were getting commission from the bank. As per Revenue the said service falls under the category of Business Auxiliary Services which have been introduced from 1/7/2003, but appellant failed to pay service tax on the said services. Apart from above services of Business Auxiliary services, the appellant also received Commission for the sales of car from car dealer/manufacturer, thus acted as a commission Age .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

car, demanded of service tax amounting to ₹ 1,42,114/- was also proposed. In the adjudication it was held that services provided to the bank towards sale of loan to various customers is classified under Business Auxiliary Services and the service tax demand was confirmed. Similarly, in respect of commission received towards sales of vehicle was classified as commission under Business Auxiliary Services and the service tax demand thereon was confirmed, in additionm the penalties under Secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ommissioner of C. Ex. Aurangabad[2014(33) STR 506 (Tri. LB)] decided the issue. The confusion was prevailing whether the services of promotion and marketing of loan of the bank and financial institution would fall under the Business Auxiliary Services or under Business Support of Service. In view of this confusion, since various judgments passed by this Tribunal, there is no suppression of fact on the part of the appellant. He also submits that the appellant has not suppressed the transaction of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rs from banks/non banking financial companies (NBFC) for introducing customer seeking finances/loans to such bank/NBFCs subject to service tax. By this circular, it was clarified the said service shall be taxable and will be classified under Business Auxiliary Service. From above clarification of the board, it is evident that the issue of taxability of the service in question was not free from doubt therefore extended period should not be invoked. It is also settled law that when there are confl .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ial Services Vs. Commr of S.T. Bangalore[2007(8) STR 505(Tri. Mum)] (b) Roshan Motors Ltd. Vs. CCE, Meerut[2009(13)STR 667(Tri. Del)] (c) City Motors & Financial Services Vs. CCE, Gurgaon[2012(25) STR 449(Tri. Del)] (d) South City Motors Ltd Vs. Commr. Of S.T. Delhi[2012(25) STR 483( Tri. Delh)] (e) Brij Motors Pvt Ltd Vs. CCE, Kanpur[2012(25) STR 489(Tri. Del.] (f) Commr. Of C. Ex. Cus & S.T. Vs. Charak Pharma P. Ltd[2012(278) ELT 319(Guj)] (g) Gemini Mobiles Pvt Ltd Vs. Commr. Of C. Ex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

able to service tax. Therefore the amount of commission received from the bank and accounted for in the books of account of the appellant will only be chargeable to the service tax therefore quantification made in the show cause notice as well as confirmation of demand of the same amount is incorrect. As regard the Business Auxiliary Services provided for sale of vehicle, he submits that it is purely a service of Business Auxiliary services and the same was exempted vide Notification No. 14/04-S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ty of the appellant hence there is suppression of fact on their part and extended period rightly invoked. In support of his submission he placed reliance on judgment of this Tribunal in case of Jai Bharat Automobiles Ltd Vs. Commr. Of Service Tax, Mumbai[2015-TIOL-1570-CESTAT-MUM]. 5. We have carefully considered the submissions made by both sides and perused the record. 6. We find that as regard the admissibility of the services of promotion and marketing loans and finances on behalf of the ban .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

whether any service provided to HDFC bank is classifiable under Business Auxiliary services or Business Support Services. As regard the Business Support Service it became taxable only from 1/5/2006, even there were some judgments wherein it was held that the identical services is of Business Support Service therefore it cannot be said that the appellant has intentionally avoided the payment of service tax. The issue was not free from doubt as even the board also realized and issued a circular d .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

bench in case of Pagariya Auto Center(supra). It is settled law that where in the case, the issue involved is of interpretation of law, the extended period cannot be invoked. Therefore in the present case also all the circumstances are common as existing in various judgments which are reproduced below: Bridgestone Financial Services 5. We have gone through the records of the case carefully. Shri Sharath Reddy, Proprietor of the appellant has given a statement before the Superintendent, Central E .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing loans on behalf of M/s Citibank N.A., and M/s. Citi Financial Retail Services India Ltd. The issues to be decided are the following : (1) Under what category the services rendered by the appellant are liable to service tax in terms of Finance Act 1994? (2) whether the show cause notice is time barred as contended by the appellants? Even though the statements were taken on 20-9-2004, the show cause notice has been issued for the period from July 03 to June 04 only on 13-10-05. It is very clea .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

afide belief that service tax is not liable to be paid in respect of services rendered by them. There is no finding that there was willful suppression of facts with an intent to evade payment of taxes. Even the show cause notice has not properly brought out the intent of the appellant to evade taxes by willful suppression of facts. In these circumstances, the extended period cannot be invoked. Thus the demand is hit by time bar. The appellants strongly contended that the services rendered by the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

; or (ii) promotion or marketing of service provided by the client; or (iii) any customers care service provided on behalf of the client; or (iv) any incidental or auxiliary support service such as billing collection or recovery of cheques, accounts and maintenance, evaluation of prospective customs & public relation services, as a Commission agent, but does not include any information technology service . From the above, it is seen that promotion or marketing of services provided by the cli .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

es. They are actually clients of the appellants. Since the appellants promote the services rendered by their clients, it is very clear that during the relevant period, the services rendered by the appellant would definitely fall within the category of Business Auxiliary services. However as far as the present case is concerned. This is only of academic importance as we have set aside the demand on account of time bar. In view of this we are not discussing the other issues raised by the appellant .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t the representatives of these financial institutions are accommodated in the dealer s premises itself. The prospective buyers are introduced by the appellant to the finance companies and help rendered in processing the documents and obtaining loan and then vehicles sold to them. For this role, the appellant is receiving service fees from the financing companies. The original authority [as well as Commissioner (Appeals)] have held that the service charges received by the appellant represents cha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d is acceptable. In view of fact that the case involved interpretation of question of law, we hold that this is not a fit case for imposition of penalty. Therefore, penalties imposed are set aside. City Motors & Financial Services The Appellants had entered into agreements with different banks such as ICICI Bank, HDFC Bank, Citi Bank and Non-Banking Companies (NBFCs) such as Maruti Finance, Maruti Countrywide and Citimobile Finance to market car-loan to potential customers. For loan taken by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

as may be seen from the decisions quoted by the Appellants. The Higher Courts have been taking the view that in such situations the extended period of time cannot be invoked for raising demand. Even in the case of Bridgestone Financial Services the Tribunal has given the benefit for such reason. In this case also the demand is raised beyond the time limit of one year and such demand cannot be sustained. South City Motors Ltd The Appellants are dealers of Ford Motor vehicles and they had entered .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

3. The period involved in this appeal is prior to 10-9-2004. The Show Cause Notice was issued on 20-4-2006. The Appellant is paying service tax from 10-9-2004. This matter relates to scope of the entry for Business Auxiliary Services . There was considerable doubt about its coverage because of the very nature of the entry. There are contrary decisions of the Tribunal in the matter. In most of the decisions like Bridgestone Financial Service and Roshan Motors Ltd., Tribunal has taken the view tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t no penalty is imposable. Brij Motors Pvt Ltd - The Appellants had entered into agreement with ICICI Bank to provide sourcing and referral business to promote market loan from the bank to potential customers by setting up ready to interact outlets in the premises of the Appellants who is in the primary business of selling automobiles. For loan taken by the customers, these appellants got commission from the bank. The issue in this appeal is whether service tax is to be paid on such commission c .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n in the case of Bridgestone Financial Services the Tribunal has given the benefit for such reason. So we are of the view that the demand in this case can be sustained only to the extent covered in the normal period of limitation. In such a situation penalties are not imposable either. Charak Pharma P. Ltd 3. The respondent herein is a manufacturer of pharmaceutical products. The dispute which was raised before the Tribunal is with regard to the assessable value of the physician sample packs dis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

observed that the extended period would not be invoked in cases where the matter is referred to the Larger Bench and also discussed the effect of the Circular issued by the Board, the Tribunal held in the instant case that the demand is barred by limitation. Gemini Mobiles Pvt Ltd 4. The issue whether the activities pursued or services provided by the dealers of motor vehicles in such circumstances fall within the ambit of BAS defined in Section 65(19) and enumerated to be a taxable service in S .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

isions cited at the bar and in the order of reference to it, spelt out uniform principle to guide determination of whether a particular transaction involving an interface between an automobile dealer and a bank or a financial institution would per se amount to BAS. The Larger Bench clarified that identification of the transaction and its appropriate classification as BAS or otherwise must depend upon a careful analysis of the relevant transactional documents and only such scrutiny and analysis w .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

transactional documents and other material on record indicate a substantial activity falling within the contours of any of the integers of the definition of BAS, spelt out in Section 65(19), then it would be legitimate to conclude that BAS is provided. 6. In the light of the Larger Bench ruling clarifying contours of BAS, in respect of transactions involving automobile dealers and banks or financial institutions, there was a bona fide doubt as to whether appellants herein had provided BAS during .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the period is therefore within the normal period of limitation. In the light of the fact that there were conflicting decisions of the Tribunal which stood resolved by the Larger Bench decision in Pagariya Auto Center (supra), we are satisfied that invocation of the extended period was not justified. We so declared the position. The appellants are however liable to tax, interest and penalties for the normal period of limitation specified in Section 73. 8. We therefore set aside the respective .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Circular No. 87/05/2006-S.T., dated 6-11-2006 Authorised motor vehicle dealers and service stations - ……It has been brought to the notice of the Board that certain doubts have arisen in respect to activities undertaken by authorized motor vehicle dealers and service stations. The issues are as mentioned below :-…. (a)- (b)- (c)- (d) Whether the commission received by the automobile dealers from Banks /Non Banking Financial Companies (NBFC), for introducing the customers se .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ised by the dealers to approach such financial companies for taking loans. The automobile dealers get commission from such financial companies for directing the customers to the latter. By this activity, the automobile dealers promote or market the services provided by their customer (i.e., the financial institution), and are therefore covered under taxable service , namely, the Business auxiliary service . The tax is payable on the gross commission received by the automobile dealer. In some cas .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ove decisions on identical issue, this tribunal consistently held that in respect of services in question in case of non payment of service tax the extended period is not invokable. In the present case the period involved is July,2003 to May, 2005 whereas the show cause notice was issued on 29/5/2006. As per the discussion made herein above extended period cannot be invoked therefore service tax demand upto March 2005 is hit by limitation therefore demand pertaining to the period July, 2003 to M .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the vehicle for which demand of ₹ 1,42,114/- was confirmed, we find that appellant has claimed notification No. 14/2004-ST dated 10/9/2004, which is reproduced below: Service tax exemption to specified services in relation to Business auxiliary service In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service provi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ification shall apply to, - (i) a factory registered under or governed by the Factories Act, 1948 (63 of 1948); (ii) a company established by or under the Companies Act, 1956 (1 of 1956); (iii) a partnership firm, whether registered or not registered; (iv) a society registered under the Societies Registration Act, 1860 (21 of 1860) or under any law corresponding to that Act in force in any part of India; (v) a co-operative society established by or under any law; (vi) a corporation established b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     Latest Happenings     ↓  

Article: MISTAKES IN DRAFTING

Forum: Duty Drawback- Urgent

Highlight: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg. - Circular

Highlight: The definition of "subsidiary company" or "subsidiary" u/s 2(87) of the Companies Act, 2013 shall come into force w.e.f. 20-9-2017

Highlight: Central Government notified the All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017 - Notification

Notification: All Industry Rates of Duty Drawback Schedule w.e.f. 1.10.2017

Circular: Investment by Foreign Portfolio Investors in Corporate Debt Securities – Review

Notification: Exemptions on supply of services under UTGST Act

Notification: Rates for supply of services under UTGST Act

Notification: Exemptions on supply of services under IGST Act

Notification: Rates for supply of services under IGST Act

Notification: List of Exempted supply of services under the CGST Act

Notification: Rates for supply of services under CGST Act

Highlight: Acceptance of deposits by companies from its members - conditions relaxed in case of Specified IFSC Public company and a private company - Rule 3 amended

Notification: Rate of exchange of conversion of the foreign currency with effect from 8th September, 2017

News: Tax Payers Advised To Confirm Identities Of Income Tax Search Authorities

Notification: Amendment in Appendix 3 (SCOMET items) to Schedule- 2 of ITC (HS) Classification of Export and Import Items 2012

Forum: GST Invoice

Notification: The Customs and Central Excise Duties Drawback Rules, 2017

Circular: The Customs and Central Excise Duties Drawback Rules, 2017 and All Industry Rates (AIRs) of Drawback related changes -reg.

News: GST implementation smoother than expected: Jaitley

News: Blockage of Working Capital of Exporters

News: Clarification about Transition Credit

Forum: GST - TRAN1 - filed - Data uploaded with Remarks Processed with Error - Not coming in Electronic credit ledger - need suggession guidance

Forum: 3B mistake

Forum: Input tax credit

Forum: Excise duty credit on finished stock at additional place of business.

Forum: Due date of Filing TRAN-1

Highlight: Diversion of income at source - Joint venture agreement - 97% of the receipt transfer to M/s TRG Industries (P) Ltd. - scope of the agreement - it is diversion by overriding title - not taxable in the hands of assessee - HC

Highlight: Expenditure on eligible projects or schemes u/s 35AC - After 01.04.2017 the legislature desired to withdraw such deduction. - The Union legislature was competent to introduce such amendment - HC

Highlight: Transfer of trading assets at cost price, the profit component also stood transferred to the outgoing Directors, which otherwise belonged to the Company - the fact that AO has made the addition in the hands of the Directors would not make any difference - additions confirmed - HC

Highlight: The interest u/s 234B of the Act cannot go beyond the stage of S.245D(I) before the Settlement Commission - HC

Highlight: Galvanized iron pipe is a different commercial commodity than a iron pipe, therefore the activity of galvanization in our considered opinion amounts to manufacture - Deduction u/s 80-IB allowed - HC

Highlight: Penalty u/s 271C - non deduction of TDS on interest paid to sister concerns in terms of Section 194A - Levy of penalty confirmed - HC

Highlight: Disallowance of interest - reference to section 179 - The legislature has also recognised, that the doctrine of lifting of veil in the matter of tax dues is to be applied to prevent fraud etc. and not where the company has suffered despite its normal bona fide function. - HC

News: RBI Reference Rate for US $

Notification: Amendment in Notification No. S.O. 3118(E), dated the 3rd October, 2016

Highlight: Discount on ESOP to be allowed as business expenditure u/s 37(1), during the years of vesting on the basis of percentage of vesting during such period, subject to upward or downward adjustment at the time of exercise of option.

Notification: Central Government appoints the 20th September, 2017 as the date on which proviso to clause (87) of section 2 of the Companies Act 2013, shall come into force

Notification: Companies (Restriction on number of layers) Rules, 2017

Highlight: Penalty u/s 271(1)(c) - additional income disclosure - surrender of income post survey u/s 133A - he disclosure made by the assessee is voluntary in nature, in the revised return - no penalty

Highlight: Reopening of assessment - notice u/s 148 issued on the directions of JCIT / CIT - a perusal of reasons for initiating reassessment proceedings clearly show that they are against the sprit of provisions u/s 147

Highlight: MAT - Adjustment to book profit - computation u/clause (f) of Explanation-1 to section 115JB(2) is to be made without resorting to the computation as contemplated u/s 14A r.w.Rule 8D of I.T. Rules.

Highlight: Addition on account of alleged suppression of service value received - the addition made simply believing the Form 26AS will be an arbitrary exercise of power which cannot be sustained

Notification: Exempts intra state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 12/2017-UTT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017

Notification: Seeks to amend notification No. 11/2017- UTT(R) to reduce CGST rate on specified supplies of Works Contract Services

Highlight: Liability to pay duty on import of software - Though no authorization was given by the appellant to DHL, it is an undisputed position that the software has, in fact, been ordered by the appellant and have been delivered to them by DHL - the appellant is to be considered as the importer

Notification: Exempts inter-state supply of heavy water and nuclear fuels from DAE to NPCIL

Notification: Seeks to amend notification No. 09/2017-IT(R) to exempt right to admission to the events organised under FIFA U-17 World Cup 2017



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version