TaxTMI 
TaxTMI 
2011 (11) TMI 410
X X X X Extracts X X X X
X X X X Extracts X X X X
....s 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". 2. The entry for Business Auxiliary Services in Finance Act, 1994 during 1-7-2003 to 9-9-2004 was as under :- "Business Auxiliary Service' means any service in relation to :- (a) Promotion or marketing or sale of goods produced or provided by or belonging to the client; or (b) Promotion or marketing of service provided by the client; or (c) Any customer care service p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion technology services and any activity that amounts to manufacture within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944." 4. The department made out a case that their activity amounted to "Business Auxiliary Service" even for the period prior to 10-9-2004 and issued a Show Cause Notice dated 31-7-2007 demanding such tax for the period 20-10-2004 to 18-12-2007. The adjudicating authority examined the matter and issued an order confirming the tax demanded along with interest and also imposing penalties under Sections 76, 77 and 78 of Finance Act 1994. Aggrieved by the order the Appellants filed an appeal with the Commissioner (Appeals) who rejected their appeal. The Appellant is challenging this order by Com....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Chamundeswari Associates v. C.C.E. - 2008 (12) S.T.R. 623. (c) Car World Autoline v. C.C.E. - 2007 (83) RLT 846 = 2008 (9) S.T.R. 246. (d) Prabhat Financial Services v. C.C.E. - 2008 (9) S.T.R. 272. 7. The entry prior to 10-9-2004 covered "promotion or marketing of services provided by client". In this case the Banks/NBFCs were the client of the Appellant and the Appellant was promoting the services namely sanctioning of car-loans to the loan seekers. This part of the definition has remained the same prior to 10-9-2004 and thereafter. Clause (iv) of the definition of this service amplifying the scope of the primary entries to cover "collection or recovery....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service provided to a client by a commercial concern in relation to the business auxiliary service, in so far as it relates to,- (a) procurement of goods or services, which are inputs for the client; (b) production of goods on behalf of the client; (c) provision of service on behalf of the client; or (d) a service incidental or auxiliary to any activity specified in (a) to (c) above, from the whole of the service tax leviable thereon under Section 66 of the said Finance Act : Provided that nothing in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... fall under item (c). So the Appellant is not eligible for exemption under the above notification. 11. Now the scope of Notification No. 25/2004-S.T., dated 10-9-2004 is to be examined. This notification reads as under : "In exercise of the powers conferred by sub-section (1) of Section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts that portion of the value of following taxable services, namely - (a) services provided to a customer, by a commissioning and installation agency in relation to erection; (b) services provided to any person, by a sub-broker in connection with the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tor engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 or rules made thereunder, in relation to a tour; and (h) service provided to a policy holder, by an insurer carrying on life insurance business in relation to the risk cover in life insurance, from the whole of service tax leviable thereon under Section 66 of the said Act, which is received by the service provider prior to the 10th day of September, 2004." 12. This notification has two peculiarities as compared to usual exemption notifications. Firstly this notification is for value of taxable services rather than the service itself. Secondly the notification provides exemption....