TMI Blog2019 (6) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is rightly classifiable under Business Auxiliary Service . Penalty u/s 78 of FA - HELD THAT:- The appellant had deposited the entire amount of Service Tax demanded under the Show cause notice dated 30 November, 2006 along with interest much before the issue of show cause notice. Secondly, there was a certain amount of confusion at the field level for proper classification of activity undertaken by the appellant as to whether it is classifiable under the category of Business Auxiliary Service or under Business Support Service and since there have been multiplicity of interpretation with regard to the applicability of service tax law in the nature of activity undertaken by the appellant, the issue of imposition of penalty under section 78 of Finance Act is not warranted - the imposition of penalty under section 78 in this case is not justified. The confirmation of Service Tax demand is justified but the imposition of penalty under section 78 of the Finance Act, 1994 is set aside - appeal allowed in part. - Service Tax Appeal No. 51691-51692/2016 - FINAL ORDER NO. 50804 /2019 - Dated:- 25-6-2019 - MR. DILIP GUPTA, PRESIDENT AND MR. C L MAHAR, MEMBER ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r dealers/ agents were engaged in display of promotional material for advertising of loan by the banks. (ii) The car dealers / agents were engaged in doing first level of scrutiny of the prospective customers i.e. identifying such buyers who could then be pursed for marketing of loan. (iii) The also acted as an intermediary between the banks and the customer for canvassing the case of the customer with the banks, scrutinizing the documentation as well as collecting and depositing the cheques of the installments for the initial period before the sale of the car as enshrined in the agreement. 3. It can be seen from the above terms of agreement / contract that the appellant was engaged by the banks and NBFCs for soliciting customers for availing loan for car etc. by Banks / NBFCs. The appellant was also undertaking advertisement and joint publicity of loan facilities. In addition to above work, the appellant was also facilitating the filing of forms by customers, preliminary scrutiny of the documents submitted by the customers for obtaining car loans and, thereafter, enabling the banks to process the loan application, collection of cheques from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, in reality, the appellant is acting on behalf of the bank/ NBFCs by having a direct interaction with the customer. In case of Business Support Service, that would not be the case. The interaction would be between the service receiver and service provider, i.e. the bank /NBFCs and the appellant, and the customer would not be dealing with the service provider i.e. the appellant at all. Once the appellant deal with the customer, he is acting on behalf of the bank and therefore classification of services provided by the appellant is appropriately to be classified under Business Auxiliary Service and not under Business Support Service. Further, the appellant as DSA is not only directly supporting these banks/NBFCs in processing the forms etc. but also supporting the said bank/NBFCs in enhancing its clientele by adding more. Therefore, by introducing new clients to the bank, the appellant promoted and marketed the services provided by the said bank and developed prospective customers and vendors for their services. The continuous activities undertaken by the appellant by having a regular office and permanent commercial establishment for providing services in relation to promoting, mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the above provisions of Section 78 of Finance Act, 1994, the appellant s attention is invited to the provisions of Section 78 of the Finance Act, 1994, wherein it has been provided that if the tax determined is paid along with appropriate interest thereon within 30 days of the date of communication of order of the Central Excise Officer, who has determined such tax, the amount of penalty liable to be paid by such person shall be twenty-five percent of the tax so quantified by divisional AC/DC within 15 days of the receipt of this order. 7. The appellant is before us against the above mentioned impugned Order in Appeal dated the 29 March, 2016. 8. The learned advocate appearing on behalf of the appellant submitted that so far as the show cause notice dated 30 November, 2006 is concerned, the entire amount of service tax along with interest has been deposited by the appellant much before the issue of show cause notice. It has also been submitted that the part of the demand under the show cause notice dated 30 August, 2007 which has been confirmed by the Order-in-Original No. 20/SL Meena/2009 dated 31 March, 2009 (as mentioned at S.No. 1 at paragraph 1) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gurgaon -2012 (25) STR 449 (Tri-Del). 10. It has been claimed that since the entire amount of service tax has been paid by them before the issue of show cause notice and therefore, it was wrong on the part of the Commissioner (Appeals) to confirm the penalty under section 78. The learned advocate has drawn our attention to various decisions of this Tribunal in this regard. 1. Bas Engineering Pvt. Ltd. vs. CST, Delhi 2014 (33) STR 452 (Tri-Del); 2. CCE vs Auto World 2010 (18) STR 5 (All); 3. CCE, Mangalore vs. Shantha Satelite Vision 2009 (13) STR 76 (Tri-Bang); 4. Excellent Classes vs. CST, Ahmadabad 2009 (13) STR 77 (Tri-Bang); 5. Rohan Builders Ltd. vs. CST, Bangalore 2009 (13) STR 56 (Tri-Bang). 11. We have also heard the learned Departmental Representative who has reiterated the findings given in the impugned order in appeal. 12. After hearing both the sides and on perusal of record of the appeal, we feel that the matter in its entirety is no longer res integra as it has been already been decided by this Tribunal in the case of Brij Motors Pvt. Ltd. vs. CC Kanpur reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Institution in the appellant s premises. We further notice from the statement of commission paid by ICICI Bank, that the amount varies month to month. In some months, commission is less than ₹ 1,000/- whereas in some months it exceeds ₹ 30,000/-. Thus the documents on record prove that commission/incentive earned by appellant depends on level of business generated for the Bank/Finance Company. Thus, the activity without any doubt falls under BAS for promoting or marketing of service provided by client . We also take notice of the Larger Bench s decision of this Tribunal dated 12-9-2013 as reported in 2014 (33) S.T.R. 506, wherein taking notice of several conflicting decisions of Tribunal, the Larger Bench observed as follows : 20. On a consideration of the apparent conflict of opinion in the decisions mentioned in the order of reference and the other decisions which were cited at bar, it is clear that no uniform principle emerges as would guide determination of whether a particular transaction involving an interface between an automobile, dealer and bank or financial institution would per se amount to BAS. The identification of the transaction and its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erference. 16. So far as the imposition of penalty under section 78 of Finance Act, 1994 is concerned, we feel that firstly the appellant had deposited the entire amount of Service Tax demanded under the Show cause notice dated 30 November, 2006 along with interest much before the issue of show cause notice. Secondly, there was a certain amount of confusion at the field level for proper classification of activity undertaken by the appellant as to whether it is classifiable under the category of Business Auxiliary Service or under Business Support Service and since there have been multiplicity of interpretation with regard to the applicability of service tax law in the nature of activity undertaken by the appellant, the issue of imposition of penalty under section 78 of Finance Act needs to be examined. In our opinion, penalty shall not be imposed under section 78 of the Finance Act if there is no deliberate violation of the statutory provisions of law. In the present case, there is no presence of any of the element like fraud, collusion, willful mis-statement, suppression of facts or contravention of any of the provisions with intent to evade payment of Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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