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TMI Blog2019 (6) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... premises of the appellant which is engaged in business of sale of cars / automobiles having a dealership of Maruti Udyog Ltd. It was noticed by the Department that the appellant was acting as a marketing agent for several banks and financial institutions who are engaged in the business of car finance. These car dealers/ firms / agents (including the appellant) were acting as direct selling agents / direct marketing agents for various banks and financial institution such as ICICI Bank, HDFC Bank, Citi Bank and other Non Banking Finance Companies such as M/s. Maruti Finance, M/s. Maruti Countrywide and M/s. City Mobile Finance Ltd. etc. The detailed arrangements between the appellant and various banks and financial institution have been formalized in an agreement / contract. The broad terms of these agreements / contracts are summarized as below: "(i) Car 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 bet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubject matter of show cause notice dated 31 August, 2007. 5. It has been held by the Commissioner (Appeals) that from the definition of both the services under the Finance Act, 1994, namely 'Business Support Service' and 'Business Auxiliary Service' are distinguishable as that 'Business Support Service' is a service provided in relation to business or commerce whereas 'Business Auxiliary Service' is a service provided on behalf of the client. So, as far as appellant's contention that the services fall under the category of 'Business support services' and not under 'Business Auxiliary Service' is concerned, it has to be seen whether the services are provided to the customer or to the bank. When the applications forms, other documents etc. are collected for the purpose of sourcing of car loan, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is hereby declared that any amount paid to the credit of the Central Government prior to the date of communication of the order referred to in the second proviso to sub-section (1) or the first proviso to sub-section (2) shall be adjusted against the total amount due from such person. The second proviso to sub section (1) speaks as under: "Provided further that where such Service Tax and the interest payable thereon is paid within thirty days from the date of communication of order of the Central Excise Officer determining such Service Tax, the amount of penalty liable to be paid by such person under the first provision shall be twenty-five per cent of such Service Tax. In view 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, the Commissioner (Appeals) erred in confirming the service tax demand under the Business Auxiliary Service. The learned advocate has also assailed the order in appeal on the ground that the extended period of limitation is not applicable when there is multiplicity of interpretation and classification of the service. He has placed on record the following decisions in support of his claim: 1. Krishna Financial Services vs. CCE, Kanpur' 2013 (30) STR 434 (Tri-Del); 2. South City Motors Ltd. vs. CST, Delhi 2012 (25) STR 483(Tri-Del); 3. City Motors & Financial Services vs. CCE, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Tribunal that the activity akin to the one taken by the appellant is rightly classifiable under service category of 'Business Auxiliary Service'. Relevant extract of the above mentioned decision is reproduced hereinbelow: 10. Having considered the rival contentions, we find that the appellants have not produced any agreement between them and Bank/Financial Institution to the effect that there is agreement to provide only space/venue to the Bank/Financial 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 Rs. 1,000/- whereas in some months it exceeds Rs. 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 foll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Pagariya Auto Center (supra) also supports the case of classification of the activity undertaken by the appellant under the category of 'Business Auxiliary Service'. 15. In view of the above, we hold that the activity undertaken by the appellant is rightly classifiable under 'Business Auxiliary Service' and therefore, the findings given in impugned order in appeal do not call for any interference. 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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