TMI Blog2017 (10) TMI 801X X X X Extracts X X X X X X X X Extracts X X X X ..... oans to the customers of the appellant which results in boosting the business of the financial institutions and in recognition of the said assistance rendered by the appellant, the financial institutions reciprocate with commission in some percentage of loan distributed though the appellant and this activity is a clear case of promotion of service rendered by the clients i.e. financial institutions, which is specifically included in the category of BAS specified under Finance Act, 1994 and are liable to service tax w.e.f. 01/07/2003. Such promotion of the business of financial help promote the business of the appellant also and does not alter the character of BAS - the appellants are liable to pay the services tax under the category of BAS. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said activity of the appellant appeared to be an activity of promotion of service provided by the financial institutions, the original authority after following the principles of natural justice had confirmed the demand of service tax amount of ₹ 2,20,365/- for the period from 01/07/2003 to 31/03/2005, in terms of Section 73(2) of Finance Act, 1994, under the category of Business Auxiliary Services (BAS), demanded interest of ₹ 21,977/- under Section 75, and also imposed penalty of ₹ 200/- per day under Section 76, penalty of ₹ 1000/- under Section 77 and penalty equivalent to tax amounting to ₹ 2,20,365/- under Section 78 of the Finance Act, 1994. Service tax amounting to ₹ 2,20,365/- and penalty of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Pagariya Auto Centre Vs. CCE [2014(33) STR 506 (Tri. LB)]. She has also submitted that after 16/06/2005, the appellants have been remitting services tax, since by an explanation Commission Agent has been defined and the services rendered by the appellants would fall within the said substituted explanation. She also submitted that there was no liability contemplated for payment of service tax prior to 16/06/2005 and therefore the appeals in question relating to the period prior to the substitution of explanation ought to be allowed. She further submitted that the Circular No.87/05/2006-ST dt. 06/11/2006 cannot be applied in the case in hand especially in view of the fact that the levy under dispute is prior to 16/06/2005. In support of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the normal course of business / trade, lease rentals are invariably at a fixed sum and nowhere related to the volume of the business undertaken. Whereas in the present case, it is the commission which is being received by the appellant and not the fixed rental charges. In support of his submission, the learned AR relied upon the following two decisions:- i. Ved Automotives Vs. CCE, Kanpur [2016(44) STR 140 (Tri. All.) ii. Arpanna Automotive Pvt. Ltd. Vs. CC CE [2016(43) STR 397 (Tri. Mum.)] 7. After considering the submissions of both the parties, we find that the commission received by the appellant is not in the nature of rental charges as claimed by the appellant. Moreover as per the lease agreement also, appellants are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o pay the services tax under the category of BAS. 8. As for as levy of penalty is concerned, the learned counsel for the appellants submitted that the adjudicating authority under Sections 76, 77 and 78 in the first round of litigation has clearly held that it is a fit case for taking a lenient view and therefore he did not propose to impose any penalty under Section 76, 77 and minimum penalty of ₹ 5000/- has been imposed under Section 78. She further submitted that the levy of penalty is contrary to the findings of the adjudicating authority. She further submitted that in the present case the appellants have paid the tax along with interest before the adjudication proceedings being initiated, on being pointed out by the Department ..... X X X X Extracts X X X X X X X X Extracts X X X X
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