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TMI Blog2018 (6) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax on such commission/incentives received from the bank for the period 10.07.2003 to 31.03.2006. The adjudicating authority confirmed the demand and imposed the penalty under Section 77 & 78. The appellant, being aggrieved by the Order-in-Original filed an appeal before the Commissioner (Appeals), who vide the impugned order rejected the appeal therefore the appellant is before us. 2. Shri Bhavin Mehta, Learned Chartered Accountant appearing on behalf of the appellant submits that the nature of activities carried out by the HDFC Bank's Auto Finance Scheme, handling all the required documentation both pre and post disbursements including completing the formalities of R.C. Book, insurance policy of vehicle, etc. The composite set of activities provided by the appellant cannot be classified on the basis of a component activity as promotion or marketing of services falling under "Business Auxiliary Services". The activities carried out by appellant form a composite task and are integrally connected and not dissociable from one another. If several activities carried out by the appellant are considered in a composite manner then the service is not classifiable under as "Business Auxi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subvention. He further submits that the demand is time barred, the fact of the present case is identical to facts of the decision in the case of Addis Marketing Vs. Commissioner of Central Excise, Mumbai - 2017 (50) STR 56 (Tri.-Mumbai). He submits that this Tribunal in the case of Addis Marketing (supra) held that there was a confusion regarding the taxability on the subject service which has been settled by the Larger Bench decision in the case of Pagariya Auto Center Vs. Commissioner of Central Excise, Aurangabad - 2014 (33) STR 506 (Tri.- LB), accordingly the demand is time barred. Therefore considering the judgment on identical issue and fact in the case of Addis Marketing (supra) the entire demand which is beyond the normal time limit of one year from the date of show-cause notice is time barred. He also submits that the Learned Additional Commissioner took more than four years to adjudicate the show-cause notice and pass the impugned order on 10.01.2012 confirming the demand. It implies, even the Learned Additional Commissioner was not sure about applicability of Service Tax on the activity of the appellant, as he took considerable time period to pass the order. As regard p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of account, therefore it cannot be said that the appellant has suppressed any material fact with intention to evade payment of Service Tax. The identical facts regarding the limitation was involved in the case of Addis Marketing (supra), wherein this Tribunal has categorically held that the extended period of limitation cannot be invoked. The relevant portion of the said judgment is reproduced below:- "6. We find that as regard the admissibility of the services of promotion and marketing loans and finances on behalf of the bank and non banking financial institution in various judgments cited by the ld. Counsel, the Larger Bench of this Tribunal as well as Board Circular dated 6-11-2006 it has been settled that service provided by the appellant to HDFC bank is classifiable as Business Auxiliary Services and liable for service tax. However as regard the submission on limitation, we observed that as per the confusion and doubt prevailing in respect of impugned service, the appellant entertained the bona fide belief that whether any service provided to HDFC bank is classifiable under Business Auxiliary services or Business Support Services. As regard the Business Support Service it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued beyond the normal period of one year. The learned advocate stated that after the statements have been taken and the records given on 20-9-2004, there was no further investigation by the department. He emphasized the point that there was no willful suppression with intent to evade payment of tax. He relied on a large number of decisions of the Apex Court cited (supra). From the statement of Sharath Reddy, it appears that the appellants were under a bona fide 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 them would come only under the category of "business support services" which was introduced only with effect from 1-6-2006. Since the period of demand is prior to 1-6-2006, it was urged that the said services could not have been brought under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 charges for business auxiliary service rendered by the appellant to the said finance companies and confirmed the service tax along with interest and imposed penalties under Sections 76, 77 and, 78 of the Finance Act, 1994.......... ....7. The submission by the learned advocate that this is a case of interpretation of the taxing entry and no mala fide or element of suppression or mis-statement is involved and, therefore, imposition of penalties under Sections 76, 77 & 78 is not warranted 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 B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... situations the extended period of time cannot be invoked for raising demand. In this case also the demand is raised beyond the time limit of one year and such demand cannot be sustained. However, demand if any, which is within the normal period of one year is sustainable. Interest is payable on such amount but 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 categorizing the activity of the Appellants as "business auxiliary service". 14. The period involved in this appeal is 20-10-2004 to 18- 12-2007. The Show Cause Notice was issued on 21-2-2008. As can be seen from the discussions above the matter was being interpreted by judicial forums in different ways as may be seen from the decisions quoted by the Appellants. The Higher Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S. 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 would ensure a rational classification of the transaction. The Tribunal pointed out that where mere space is provided along with furniture for facilitating accommodation of representatives of financial institutions in the premises of an automobile dealer and consideration is received for that singular activity, such consideration may perhaps constitute a rent for the provision of space and associated amenities and such transaction would not amount to BAS. Alternatively, held the Tribunal, if the 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 ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p the buyers of the vehicles for arranging the finances. For this, they have a tie-up with Banks/Non-banking Finance Companies. The customers are advised 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 cases, the dealers share part of their commission with their customers to attract them. However, this is an independent transaction between the automobile dealer and the purchaser of the vehicle, and does not involve the service rendered by the automobile dealer to the finance company. Therefore, the tax payable by the dealer would be on the gross amount received from the financial company and not on the balance amount, i.e., after excluding the amount that he passes on to the customer. From the above decisions on identical issue, this Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erative society established by or under any law; (vi) a corporation established by or under any law; or (vii) a body corporate established by or under any law, unless such factory, company, partnership firm, society, cooperative society, corporation or body corporate, as the case may be, provides any business auxiliary service in respect of any activity specified in (a) to (d) above in relation to agriculture, printing, textile processing or education. We find that the appellant is proprietary concern therefore they are prima facie eligible for above referred exemption notification as the services is covered under 'provisions of services on behalf of client' which is one of the services specified under the notification. However ld. Adjudicating Authority has not given any findings as regard the claim of this notification categorically made by the appellant before him. We are therefore of the view that eligibility of this Notification should be re-considered by the Adjudicating Authority. As regard the penalties imposed under Sections 76, 77 and 78, we find that as per our above discussion on limitation, there is bona fide belief of the appellant for non payment of service t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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