2007 (10) TMI 552

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....s rendered by the respondent under the head 'Business Auxiliary Service'. The respondent-assessee had received commission from the Bank as per their balance-sheet for the period from July, 2003 to March, 2004 in connection with advancing loans to the customers of the assessee who wanted to purchase vehicles for which the assessee was the dealer. In this case, the assessee had not filed ST-3 Return of 'Business Auxiliary Service', though such registration was taken. According to the Revenue, the assessee had deliberately suppressed the factual information with an intention to evade Service Tax on the "pay out" received by them from the bank for their services. The case of the assessee was that, in order to facilitate their customer to avail ....

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.... difference that, in this case the assessee had filed the return but only of the net amount i.e. after deducting a portion of the commission passed on to the consumers of the assessee for whom the assessee had arranged for the finance from the banks. 3. In Service Tax Appeal No. 241 of 2006, the Revenue has challenged the same impugned order of the Commissioner (Appeals) setting-aside the order-in-original made on 18-10-2005 confirming the demand of Rs. 3,87,941/-, appropriating the Service Tax of Rs. 2,04,604/-, and directing payment of the balance amount of Rs. 1,83,337/-, and imposing penalty of the like amount under Section 78 of the Act, besides also imposing penalty @ Rs. 100/- per day under Section 76 of the Act, penalty of Rs.....

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....a Banking Company or a Financial Institution to a customer. 5. The Appellate Commissioner has allowed the appeals of the assessees and set-aside the adjudicating orders mainly on the ground that, the Banks are not the clients of the assessees. In paragraph 10 of the impugned order, he refers to the definition of 'Business Auxiliary Services' by observing that the tax is on the commission received from the client. It is observed that the assessees were not getting any remuneration or fees directly from the client and, therefore, they did not satisfy the requirement of the definition of 'Business Auxiliary Services'. It is further observed that there was no value addition by these assessees who had only been getting the share of income ....

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.... other financial services provided by the banks. The banks were, therefore, their clients being recipient of such services from the respondents. It has come in evidence that the respondents were required to obtain loan applications from their customers who desired to avail loans from the banks. The respondents had undertaken to process those applications and after scrutiny forward them to the bank. Admittedly, for such services, they were paid commission by the bank, which was reflected in their account. Once consideration accrued to them, as against the services provided by them to the bank, by way of commission, it was hardly of any consequence how a portion of that commission, which as per the particulars provided by the Bank was given a....