TMI Blog2019 (8) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... been collecting some charge towards appraising the value of the pledged jewels in the process. This is not service rendered to anybody at all. It is true that, in turn, the appellant has been borrowing money from their bank but it does not mean that the appellant is supporting service of the bank. They are borrowing money from the bank on their account and in turn lending it to their members - demand set aside. The demand of interest and penalties also deserve to be set aside - appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 40435 of 2013 - Final Order No. 40978/2019 - Dated:- 30-7-2019 - MR. P. VENKATA SUBBA RAO, MEMBER (TECHNICAL) And MR. P. DINESHA, MEMBER (JUDICIAL) Shri M.N. Bha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which is chargeable to service tax under Section 65 (105) (zzzr) of the Finance Act, 1994. It is also the assertion of the department that the appellant is engaged in the activity of sanctioning jewellery loan on interest to its Members and have been collecting charge of 3% on the amount of loan subject to maximum of ₹ 100/- per loan is charged from the members which is chargeable to service tax under BSS. 3. After following the due process, the Ld. Commissioner, vide the impugned order confirmed the demands along with interest and imposed penalty under Section 77 and 78 of the Finance Act, 1994. He also ordered collection of appropriate late fee under Rule 7C of Service Tax Rules 1994 read with Section 90 of Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l produce, wherever possible, d) the main objectives of the Society are arranging for and undertaking of purchase, storing, processing and marketing of the agricultural and other produce or products of its members or of the society to the best advantage and for undertaking distribution of commodities, e) they are Providing marketing facilities such as auction, yards, drying facilities and warehousing and produce-pledge loans and thereby facilitating the farmer members to sell their produces at a remunerative price in a transparent manner by auction, f) the major commodities dealt with by the Society are cotton, maize, oil seeds, and turmeric, g) the Price of the goods i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods are sold to the highest bidder for the said produce. m) on completion of sale, the sale proceeds are disbursed to the members immediately by the society, after deducting service charges @ 2% in respect of cotton, maize and oil seeds and 2.5% for turmeric, as marketing service charges from Riots for the value of the produces sold in secret tender auction and from the merchants 1% service charges is collected. 5. Ld. counsel submits that in Section 65 (105) (zzzr) of the Finance Act Auctioneering Service is defined as follows : any service provided or to be provided, to any person, by any other person, in relation to auction of property, movable or immovable, tangible or intangi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank. Appellants are getting loans from their bank namely M/s.Salem District Central Co-operative Bank, Salem and lending to their members on interest. Therefore, this is a case of they lending money to their members and not supporting service of business of some other bank. Their finance bank, M/s. Salem District Central Cooperative Bank, Salem lends them the money which they, in turn, lend to their members. For lending money they charge an interest and for appraising the value of jewels brought by their members, they collect appraising charge of 3% subject to maximum of ₹ 100/- per loan. He would assert that by no stretch of imagination can this be called Business Support Service . In fact, it is their business and not a support to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ive society is engaged in the business of lending money to their members and have been collecting some charge towards appraising the value of the pledged jewels in the process. This is not service rendered to anybody at all. It is true that, in turn, the appellant has been borrowing money from their bank but it does not mean that the appellant is supporting service of the bank. They are borrowing money from the bank on their account and in turn lending it to their members. In view of the above, we find that demands on both these counts are not sustainable and need to be set aside and we do so. Consequently, the demand of interest and penalties also deserve to be set aside. The impugned order is set aside and the appeal is allowed with conse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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