TMI Blog2017 (5) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings initiated against assessee - the appellant deposited the service tax along with interest during the course of investigation itself - Held that: - the service tax due on taxable services were discharged by the appellant, though belatedly, with interest, upon initiation of enquiry by the department. In normal course, service tax is self assessed by the assessee. Here, the tax liability not paid in time was pointed out and as such paid later. Such payment is towards tax dues and cannot be considered as a deposit of amount for undetermined liability to be decided in future. The appellants paid service tax as per the obligation cast on them in terms of Section 68 of FA, 1994. We have already held that upon payment of such tax due, the provisions of Section 73(3) will come into play in the present case. Refund of excess amount paid by assessee - Held that: - The appellants shall be entitled for return of excess amount of tax, if any, paid by them. They have claimed that there is error in totaling the amount received as consideration from the banks. We find that this requires verification and the Original Authority can examine the correct factual position with records for sett ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for alleged willful suppression of material facts. 3. The Original Authority decided the case and passed the order dated 20.08.2008. The Original Authority confirmed the service tax demand of ₹ 24,59,565/- and also recorded that the appellant deposited the service tax along with interest during the course of investigation itself. However, no relief was given for the amount excess paid by the appellant. The Original Authority also imposed penalty of equivalent amount under Section 78 and ₹ 1,000/- under Section 77 of the Finance Act, 1994. On appeal, the impugned order upheld the original order, except for reduction of demand to ₹ 24,50,797/- with corresponding reduction in penalty imposed under Section 78. 4. The appellant, represented by Shri J.K. Mittal, ld. Advocate, contested the proceedings before the lower authorities, mainly on the following grounds:- (a) The Commissioner (Appeals) has not appreciated the provisions of Section 73(3) and various judgements in this regard. The show cause notice, issued almost after three years of making payment with interest, is not legally justifiable. No penalty is leviable in such situation as the proceedings i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not sustainable. (f) Section 80, which provides for waiver of penalty, when reasonable cause is shown for non-payment of service tax in time, is rightly applicable to the present case. (g) The amount has been paid by the appellant under influence from the Department. As the appellants are not liable to pay service tax, the amount should be refunded, with interest to them. 5. Shri Sanjay Jain, ld. AR supported the findings of the lower authorities. He submitted that the appellants were providing taxable service under the category of Business Auxiliary Service . The appellants are acting as direct selling agent/direct marketing agent, Standard Chartered Bank, HDFC Banks, Citi Bank, ICICI Bank and some non-banking finance companies (NFFC) like GE Countrywide etc. For this purpose, the appellants have entered into contract with such banks. In terms of the contract, the appellants were obliged to market the car loan products of such banks and provide such other services to the banks as laid down in the said contract. When car loans are successfully marketed by the appellants, a commission is paid by the banks/NBFC. The term of agreement clearly indicates that the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) Commission Agent means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person - (i) deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services; (b) Information technology service means any service in relation to designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems. 8. The Board vide Circular dated 20.06.2003 clarified the scope of activities covered under Business Auxiliary Services . Among other things, service provided in relation to getting a customer, verification of prospective customer, etc. are clarif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustomers. Undoubtedly, this activity falls under Clause (ii) i.e. promotion or marketing of service provided by the clients. The Tribunal referred to the earlier decisions in Roshan Motors Ltd. 2009 (13) STR 667 (T- Delhi) and Bridge Stone Financial Services 2007 (8) STR 505 (T-B). The reliance placed by the appellant on the Hon ble Supreme Court s decision in Suchitra Components Ltd. 2007 (208) ELT 321 (SC) is not appropriate. The tax liability of the appellant is not created by the circular dated 6.11.2006. The tax liability is in terms of statutory provisions under Section 65(19) of Finance Act, 1944. There were circulars of the Board clarifying the scope of service tax entry earlier to 2006 also, as mentioned earlier in this order. In view of the above analysis, we find that the appellants are liable for service tax under the category of Business Auxiliary Service during the material time. 12. Now, we consider the correctness of issue of show cause notice and the proceedings thereafter by the lower authorities. The appellants strongly pleaded that when they have paid the service tax with interest, immediately on being pointed out by the officers, the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest and to impose penalty is not warranted. 14. The appellants claimed that the amount has been paid under influence of the department and the same has to be refunded to them. We find no merit for such a claim. It is clear that the appellants have contested the show cause notice and subsequent proceedings by relying on the provisions of sub-section 73(3). We have examined the tax liability of the appellant and came to the conclusion to the effect that they are liable to service tax under the category of BAS . The appellants have discharged the service tax under the said category along with interest for delayed payment and also filed ST-3 returns. The service tax payable on taxable activities has been duly paid under proper heading and credited to the Government. No protest has been recorded by the appellant at the time of payment of service tax. As such, we find that the tax paid by the appellant in respect of taxable consideration received during the material time are correctly credited to the Government. Section 68 of the Act provides that every person providing taxable service to any person shall pay service tax at the rates specified in Section 66 in such manner and wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority can examine the correct factual position with records for settling the request made by the appellant regarding excess payment. 16. The appellants also pleaded for cum-tax benefit in terms of Section 67 of the Act. Section 67(2) of the Finance Act, 1994 stipulates as below:- 67(2) Where the gross amount charged by a service provider, for the service provided or to be provided is inclusive of service tax payable, the value of such taxable service shall be such amount as, with the addition of tax payable, is equal to the gross amount charged. 17. When the gross amount received by the appellant has been taken into account for calculating service tax, concession under Section 67(2) can be considered where there is no service tax element separately shown in the documents. We direct that the jurisdictional authority to verify whether there is any indication regarding service tax in the invoices etc. issued by the appellant. In case only gross consideration is shown in the invoices, bills raised, then the tax liability of the appellant requires to be revoked by applying the provisions of Section 67(2) of the Act. 18. In view of the above discussion and analysis, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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