2016 (12) TMI 339 - AT - Service Tax

Tribunal upholds service tax liability for loan facilitation, penalties waived

Raghuvir Motor Agencies Pvt. Ltd. Versus Commissioner of Customs Aurangabad

Raghuvir Motor Agencies Pvt. Ltd. Versus Commissioner of Customs Aurangabad - TMI Issues:Demand of service tax, interest, and penalties on amounts received for organizing customers to secure loans from financial institutions.Analysis:The appeal addressed the demand of service tax, interest, and penalties on amounts received by the appellant for organizing customers to secure loans for vehicles from financial institutions. The appellant had already discharged the service tax liability and interest. The main contention was the waiver of penalties imposed solely on the grounds that during the relevant period, the taxability of the amounts received from financial institutions was in dispute and awaited a decision by the Larger Bench.The learned Counsel for the appellant did not dispute the tax liability and interest but sought the waiver of penalties. On the other hand, the learned D.R. reiterated the findings of the lower authorities. After considering the submissions from both sides and perusing the records, the Tribunal upheld the service tax liability and interest on the amounts received from financial institutions under 'Business Auxiliary Service.'Regarding the penalties, the Tribunal acknowledged that the issue was being disputed and was pending settlement by the Larger Bench. In light of this, the Tribunal invoked the provisions of Section 80 of the Finance Act, 1994, and set aside the penalties imposed on the appellant. The appeal was disposed of accordingly, with the penalties being waived under Section 80 of the Finance Act, 1994.