TaxTMI 
TaxTMI 
2015 (6) TMI 442
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....enting as service tax from their customers/buyers failed to deposit the same with the revenue department, the officers of the service tax department visited the premises of the Appellant on 09.08.2007 and investigated the case. On completion of investigation, a show cause cum demand notice was issued to the Appellant on 16.10.2007 alleging non-payment of service tax of Rs. 4237.49 Lakhs, education cess of Rs. 51.45 Lakhs for the period from 01.04.2002 to 31.03.2007. Also, it was alleged that they have collected an amount of Rs. 93.00 Lakhs as service tax from their customers which is recoverable, under section 11D of Central Excise Act, 1944 as applicable to the Finance Act,1994. On adjudication, the Ld. Commissioner had confirmed the demand of service tax and education cess Rs. 4,64,49,133/- and imposed equivalent penalty under section 78 and penalty of Rs. 5,000/- under section 77 of the Finance Act, 1994. Besides, he has directed recovery of interest and also the recovery of collected service tax amount of Rs. 93.00 Lakhs in terms of section 11D of Central Excise Act read with Section 73A of Finance Act, 1994. Aggrieved by the said order, the assessee-appellant are in Appeal. ....
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....st charges and the lessee is entitled to own or has the option to own the asset, at the and of the lease period after making the lease payments. He has emphasized that unless there is a stipulation in the contract that the equipment shall ultimately be transferred to the customer no service tax is leviable in such cases. Referring to the clause 5 relating to the ownership and clause 31 concerning to assignment of the contracts/agreements, with their customers he has submitted that ownership of the asset at all times vests with appellant, and in the agreement no where it stipulates that the clients have the option to purchase the asset on expiry of the lease agreement. Also, the agreement clearly states that the clients cannot capitalize the vehicles/assets leased in their balance sheets. From this it is clear that the assets/vehicles provided on lease basis by the appellant are owned by it and the customers/clients do not have the option to purchase the vehicles/asset on expiry of the contract. The customers can only renew the contract for a specified period and can take the goods again on lease from the appellant. These services could be taxable under the category of 'supply o....
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....llant and take away the basic character of the agreements which is mere financing of the vehicles which were purchased by the customers. Such clauses are put in the agreement to ensure that the appellant retain the right to recover the vehicle in case of default in payment by the customers. In support of their submission that financer is not the owner of the vehicle the ld. Advocate placed reliance on the judgement of Hon'ble Rajasthan and Allahabad High Court in the cases of Padma Devi &. Ors. Vs. Gurbakhsh Singh & Ors, AIR 1973 Raj 317 and Babu Singh vs. Champa Devi & Ors. AIR 1978 All 90. The Ld. Advocate also placed heavy reliance on the judgments of Hon'ble Apex Court in Sundaram Finance Ltd. v. State of Kerala AIR 1966 SC 1178, and the Tribunal in Kusulava Finance Ltd. v. CCE 2008 (10) STR 150 (Tri-Bang) affirmed by Hon'ble Supreme Court as reported in 2010 (19) STR 175 (SC) and Bajaj Auto Finance Ltd. v. CCE - 2007 (7) STR 423(Tri-Mum) affirmed by the Supreme court reported at 2008 (10) STR 433(SC). It is his submission that the ratio of these decisions are squarely applicable to the facts of the cases. 4.6 The Ld. Advocate has submitted that no service tax is....
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....2,945/- towards contingency deposits and the total amount of service tax charged on the same Rs. 7,54,689/-. Further he has submitted that the amount of Rs. 93.00 Lakhs has been arrived at by the department by including an amount of Rs. 37,78,823/- twice. Further he has submitted that in terms of section 11D of Central Excise Act, 1944 as applicable to service tax cases, only those amounts which are collected as representing service tax are to be deposited. Therefore, the amounts which were collected as contingent deposit are not covered under the provisions of section 11D of Central Excise Act, 1944, in support of which the Ld.Advocate referred to the judgement in the case of CCE vs. Mahindra & Mahindra Ltd. - 2001 (132) ELT 632. 4.8 It is his submission that if at all any amount that could be recoverable under section 11D of CEA,1944 then it could be only Rs. 7,54,659/- and not Rs. 93.00 Lakhs as confirmed by the adjudicating authority. 4.9 Rebutting the arguments advanced by the Ld. Spl. Counsel for the Revenue that securitization transaction is classifiable under section 65(12)(a)(v) or section 65(12)(a)(ix) of the Finance Act,- 1994, the Ld. Advocate submitted that the s....
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....on that the definition of banking and financial services would cover only hire purchase and not the transactions which are in the nature of hire purchase finance. Referring to the definition of hire purchase agreement prescribed at section 2(c) of the Hire Purchase Act, 1972, the ld. Advocate submits that the hire purchase contract is a contract where the hirer of the goods has the option to purchase the goods on payment of periodical installments. In support he has referred to the judgements of Sundaram Finance, Kusalava Finance, Bajaj Auto Finance (supra). 4.11 The ld. Advocate further submits that the Commissioner has rightly dropped the demand on operating lease (Rs.673.20 Lakhs). He has submitted that in the case of operating lease, the vehicles are owned by the appellant and given on lease to the customers. He has submitted that the transaction is in the nature of deemed sale as provided under Article 366(29A) of Constitution of India. The 46th amendment to the Constitution of India empowers the states to levy sales tax/VAT on transaction in the nature of right to use goods which were earlier not excisable to sales tax as such transaction are not covered by the definition ....
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....ase the activities of the appellant are limited to first stage only i.e. creation of financial assets by giving out loans, creating a portfolio of financial assets and selling the financial assets to SPV. The appellant does not undertake the second stage of the transaction i.e. activity of re-packaging of financial assets into salable securities which is done by the SPV and purchasing banks/financial institution as contended by the special counsel for the department. 4.14 He has further submitted that after sale of the financial assets there is a service element which could either be done by the buyer himself or the buyer may appoint either the seller of the securities or a third party to undertake activities of collection, recovery, accounting of the installments due from the customers. For such activities which are in the nature of rendering service/separate agreements are entered into for a consideration. He has categorically submitted that during the relevant period, the assesse-appellant had undertaken in respect of securitization transaction only and they did not undertake the activity of collection, recovery, accounting of the installments due from the customers etc. afte....
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....these figures as correct, the burden lies on the department to prove the same by introducing evidences. In support, he has referred to the decision of this Tribunal in the case of Rajendra Jagannath Parekh and Ajay Shashikant Parekh v. Commissioner of Customs - 2004 (175) ELT 238(Tri.-Mumbai). 4.17 The ld. Advocate further submitted that the adjudicating authority has erroneously confirmed the demand of service tax of Rs. 58,19,425/- under the category of BAS during the period 2003-2006. It was confirmed against the appellant on the amount received by it as "collection commission" which is paid by the banks to appellant for recovery of EMIs from various borrowers of such banks. The adjudicating authority while confirming the demand on this count has held that the appellant is acting as collection agents for the banks and is promoting and marketing the services of such banks. He has submitted that the ld. Commissioner has failed to consider the actual activities undertaken by the appellant. The allegations in the show cause notice in this regard is vague as no particular sub-heading under which the activity of collection commission is held to be liable to service tax has been all....
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....the borrowers. Thus, the appellant is undertaking a host of activities such as evaluation, verification of the customers, processing of transaction, providing operational assistance to the banks, collecting EMIs etc., hence, such services are squarely covered under the category of "Business support Service" which has been brought into force from 01.05.2006. In support he has referred to the judgement of the Tribunal in the following cases:- * Fifth Avenue v. CST - 2009 (15) STR 387(Tri.Chen) * Wings Group of Companies v. CCE - 2008(12) STR 287(Tri.Bang) * S.R.Kalyanakrishnan v. CCE - 2008 (9) STR 255(Tri-Bang) 4.20 The ld. Advocate further submitted that management and consultancy fees is also not liable to service tax under the category of BAS. The said fees were received on account of differential interest. The ld. Commissioner has rightly dropped the demand as the said amount received by the appellant on account of difference in the Fixed Deposit rate and applicable discount rate. The department has failed to establish as to how the aforesaid amount received by the appellant could be taxable under the category of BAS. 4.21. Further, he has submitted that the ld. a....
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....erefore extended period is not applicable as has been affirmed by the Hon'ble Apex Court in the case of Association of Leasing and Financial Service Companies v. UOI - 2010 (20) STR 417 (SC) 5.1 Per contra, Shri D.K.Acharya, ld.Special Counsel for the Revenue has submitted that basic business character and function of the appellant are referred to in the proceedings incorporated in the memorandum of association. He has submitted even in the AGM held on 23.07.2008 as per clause 6, it is mentioned as business of equipment leasing, hiring, hire purchase and asset based finance of all kinds. Hire purchase finance or operating lease other than financial leasing are not shown therein. He has further submitted that as per the Hon'ble Supreme Court's judgement in Sundaram Finance's case the fundamental difference between hire purchase finance agreement and hire purchase agreement is that in case of the former the title to the goods vests on the purchaser right from the beginning and the hire purchase finance company has the right to seize the goods in case of default in non-payment of the loan by the purchaser; in case of latter the title to the goods remained with the h....
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....acked or mortgaged backed and hence an asset, but not a liquid asset M decides to convert Rs. 30.00 Crore loan into 100 securities of Rs. 30.00 Lakhs each and sells the securities to 100 parties with the terms that annual installment payment equals to Rs. 3.00 Lakhs + Rs. 30,000/- (principal + interest) for 10 years period. The NBFC 'M' however, provides the service of collecting the principal + interest from three real estate promoters and distribution of annual installment to 100 holders of securities against service charges, thus securitization is a financial service. 5.3 He submits that major component of service tax demand, that is, nearly Rs. 18.00 Crores is on this account of securitization service. Refuting the argument that gain on account of securitization is not a taxable service and the appellant did not create the securities, but sold the asset bagged loans or actionable claims to IDBI, who created the security and sold the same, it is his submission that this argument is not plausible because of the fact that if the appellant did not create and sale securities, "gain on securitization" would be a gain for IDBI and not to the appellant. Another, inconsistenc....
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....o service tax was required to be paid in rendering those non-taxable services. 7. The Ld. Advocate has contended that the assesse-appellant had been rendering the following services, namely, Financial leasing (which was last entered in the year 2001-02), equipment leasing, Hire Purchase Agreements, Operating lease agreements, Hire Purchase Finance Agreements, Loan against Hypothecation. 8. The ld. Commissioner after discussing the meaning of 'banking and other financial services' as prescribed at section 65(12) of the Finance. Act,1994 and the explanation inserted to the said provision with effect from 01.06.2007, Board's circular dt. 09.07.2001 and 28.02.2007, the judgements of the Hon'ble apex court in Federation of the Hotel and Restaurant Association of India Vs. union of India (1989) 3 SCC 634, Gannon Dunkerley's case 1993 1KTR-178 & Builders Association case(1993 1KTR 169 concluded that 'financial leasing' , 'equipment leasing', and 'hire purchase' are taxable services under the category of banking and other financial services with effect from 16.07.2001; whereas, 'operating lease', 'loan against hypothecation'....
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.... are specifically mentioned in the definition itself. 2.1 Financial leasing including equipment leasing and hire purchase: 2.1-1 In case of financial leasing including equipment leasing and hire-purchase, the service is taxable only if it is rendered by a body corporate. The term 'body corporate' has the meaning assigned to it in clause (7) of section 2 of the Companies Act, 1956. Briefly, body corporate means a private limited, public limited company or a Government company. Such companies should be either a banking company or a financial institution or non-banking financial company to come under the tax net. In other words individuals, proprietorship or partnership firms will not come under the tax net. The leasing or hire-purchase may be of motor vehicles, machinery and equipment or other goods. 2.1-2 In the case of leasing or hire purchase, it is understood that the general business practice is as follows: The service provider enters into a leasing or hire-purchase agreement with the lessee or hire-purchaser. At the time of entering into the agreement, they collect a charge called lease management fee or processing fee or documentation charges or by any other n....
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..................................... (iii) The term "financial leasing" is explained as a lease transaction fulfilling the following conditions, namely :- (a) a contract for leasing of a specific asset is entered into between two parties, (b) the contract is for use and occupation of the specific asset, (c) the lease payments are calculated so as to cover the full cost of the asset together with the interest charges, and (d) the lessee is entitled to own or has the option to own, the asset at the end of the lease period after completing the lease payment; 7.6.1 International Accounting Standards Committee defines financial lease as "lease that transfers substantially all the risks and rewards incidental to ownership of an asset, title may or may not eventually be transferred". Financial lease is a way of purchasing an asset with the help of the loan and the lessee uses the asset. Risks and rewards incidental to ownership of an asset is also with the lessee. All lease transactions particularly sale and lease back transactions are to be examined carefully on the basis of this clarification. 13. Both sides have referred to the judgement of the Honourable apex Court i....
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....consideration of the arguments advanced by both sides observed as; "24. The true effect of a transaction may be determined from the terms of the agreement considered in the light of the surrounding circumstances. In such case, the court has, unless prohibited by statute, power to go behind the documents and to determine the nature of the transaction, whatever may be the form of the documents. An owner of goods who purports absolutely to convey or acknowledges to have conveyed goods and subsequently purports to hire them under a hire-purchase agreement is not estopped from proving that the real bargain was a loan on the security of the goods. If there is a bona fide and completed sale of goods, evidenced by documents, anterior to and independent of a subsequent and distinct hiring to the vendor, the transaction may not be regarded as a loan transaction, even though the reason for which it was entered into was to raise money. If the real transaction is a loan of money secured by a right of seizure of the goods, the property ostensibly passes under the documents embodying the transaction, but subject to the terms of the hiring agreement, which become part of the buyer's title, ....
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....ment which is not made effective by registering the vehicle in the name of the appellants and even the insurance of the vehicle has to be effected as if the customer is the owner. Their right to seize the vehicle is merely a licence to ensure compliance with the terms of the hire-purchase agreement. The customer remains qua the world at large the owner and remains in possession, and on condition of performing the covenants has. a right to continue to remain in possession. The right of the appellants may be extinguished by payment of the amount due to them under the terms of the hire-purchase agreement even before the dates fixed for payment. the agreement undoubtedly contains several onerous covenants, but they are all intended to secure to the appellants recovery of the amount advanced. We are accordingly of the view that the intention of the appellants in obtaining the hire-purchase and the allied agreements was to secure the return of loans advanced to their customers, and no real sale of the vehicle was intended by the customer to the appellants. The transactions were merely financing transactions.The appeals will therefore be allowed with costs in this Court and the High Court....
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....remises and the Lessee shall accordingly bear responsibility for any damage prior to or during delivery. The delivery and freight, charges from the premises of supplier shall be to the account of the Lessee. It is hereby agreed that notwithstanding any delay.in delivery caused for reasons beyond the control of the Lessor, the Lessee shall be liable to pay the lease amount from the date of commencement of the lease and the Lessor shall not be liable for any loss caused to the Lessee by reason of delayed delivery and all charges and obligations of the Lessee shall commence and be enforceable as if delivery had been effected on that date in view of and in consideration of the Lessor having entered into appropriated the Equipment for lease to the Lessee. 03. ACCEPTANCE OF THE EQUIPMENT The Lessor shall not be responsible for any direct, indirect or consequential loss to the Lessee or to any other third party arising from any delay in delivery and/or installation of the Equipment either by the action of the manufacturer or otherwise. 04. RENT PAYMENTS Subject to right of the Lessor to vary rent as provided hereinafter, the Lessee shall during the said term (in addition to ot....
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....er be appointed to its undertakings; (e) pledge or mortgage or hypothecate or sell or attempt to pledge or sell or part with possession of or otherwise alienate or transfer the Equipment; (f) do or suffer any act or thing whereby or in consequence of which the Equipment may be distrained, or taken in execution under legal process, or by any public authority; (g) fail to keep the Equipment comprehensively insured during the period of the Agreement ; (h) fail to pay to the Government or any public authority any taxes or charge due in respect of the Equipment ; (i) remove any of the Equipment to any other place without prior written permission of the Lessor ; (j) break or fail to perform or observe any conditions on his/its part herein contained ; (k) in the opinion of the Lessor (which shall be conclusive and binding on the Lessee) there shall be or arise any danger or possibility of the Lessor's not receiving or recovering the full amount due to the Lessor under this Agreement or of Lessor's being unable to exercise any or all of the powers or rights or enforce any or all of the benefits conferred upon it by this Agreement whether by reason of any act, d....
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....dicated in the schedule is over and the Lessee has completed payments of all contracted lease rentals. 27.COLLATERAL SECURITY The monthly payment of lease rentals for the Equipment shall be secured by delivery to the Lessor of a Demand Promissory Note to be executed by the Lessee for the value of Rs. 8,95,800/-(Rupees Eight Lacs Ninety Five Thousand only). 18.2. Four sample copy of agreement for the period after 16.07.2001 have been enclosed. The first agreement was entered into between the appellant and its customer Mr. Rais Ahamad on 10.04.2006 titled as "Agreement of Lease". The Schedule-I to the said agreement mentions the cost of the equipment/vehicle i.e. 'Mahindra Pick-Up' as Rs. 4,08,248/-, Schedule-II mentions the period of lease as 47 months and lease rent as Rs. 8,561/- and Schedule-Ill shows the period of lease from 01.04.2006 to 28.02.2010, number of installment as 47 and each installment as Rs. 10,253/-. Also, the delivery order enclosed there with reflects that it was addressed to M/s Dehradun Premier Motors Pvt.Ltd., wherein the cost of vehicle was shown as Rs. 4,08,248/-, margin money paid directly as Rs. 53,506/-, the loan amount to the customer a....
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....he cost of vehicle of Rs. 7,23,366/- and the period of lease 46 months. In Schedule-III the installments are also reflected. In the letter addressed to Shri Motors, Faridabad, Haryana, it is mentioned the customer of the appellant approached for a loan-cum-hypothecation facility 27.04.2015. 18.5 The Appellant have submitted 5 (five) numbers of "hire purchase agreements' entered into before 16.07.2001.First agreement dated 27.04.2001 was between Shri Harish Kumar and the Appellant. The title of the agreement is "Hire Purchase Agreement". The description of the Appellant and the hirer and other particulars mentioned in the said agreement strongly relied by the ld.Advocate is reproduced below:- WHEREAS the Company is a financial institution providing funds, inter alia, for hire purchase of vehicles, and other assets to individuals/business concerns/other entities. WHEREAS the Hirer has approached the Company for obtaining finance and has agreed to acquire/purchase; has acquired/purchased; holds; the vehicles, more fully described in Schedule-I hereunder, hereinafter referred to as 'Hired Article' on the terms and conditions as laid down and stipulated in the profo....
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....he Hired Article under the provisions of Clause 15 of this Agreement, and shall not under any circumstances change the location of the Hired Article, without express approval of the Company. 06 RELEASE OF PROPERTY If the event the hiring continues for the full period referred to in Schedule-III hereof and the following sums of money been punctually paid:- a. all instalments due under this Agreement; b. other sums of money due hereunder; then in such event the Company shall release and relinquish all its rights and interest in the Hired Article Until such payments, the Company shall continue to have all rights and interests created by the these presents over the Hired Article together with any accession, improvements and additions made thereto by the Hirer as clearly provided in Clause 3(1) of this Agreement and rights of the Hirer shall be subject to the beneficial rights of the Company and the Hirer shall be deemed to be holding the Hired Article in trust for the Company. The Company shall be at liberty to hypothecate the Hired Article in favour of the Bankers until the Hirer shall pay the entire amount due hereunder. 09. COLLATERAL SECURITY The monthly/quarte....
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....ursheed in favour of the Appellant dated 13.03.2001. A letter of the Appellant dated 13.03.2001 addressed to Amit Auto Sales intimating that the Appellant could extend finance to Mr.Tariq Khursheed. Also the invoice of Amit Auto Sales dated 12.03.2001 was enclosed showing the total cost of the vehicle as Rs. 3,93,117.00. 18.8 The third agreement is between Mr.Surinder Singh and the Appellant dated 14.06.2000 on some conditions. The cost of the vehicle in Schedule-I was shown as Rs. 3,10,000/- and initial payment in Schedule-II was shown as Rs. 1,00,000/- amount financed Rs. 2,10,000/- and financial charges as Rs. 85,580/- and payable in 36 installments of Rs. 8,155/-. Schedule-III shows the period and the installments. The 4th Agreement is between Shri Rakesh Bhutoria and the Appellant dated 28.06.1999. Schedule-I shows the cost of asset Maruti Standard Car as Rs. 1,89,224/-, in Schedule-II besides cost of asset initial payment Rs. 47,224,-, amount financed Rs. 1,42,000/- with financial charges Rs. 39,831/- and the total amount payable in 36 installments was Rs. 1,81,831/- having 1 installment of Rs. 5,081/- and 35 installment as Rs. 5,050/-. Schedule-Ill mentions total number o....
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....9;hire purchase finance agreement' have been submitted by the Appellant. The first hire purchase finance agreement is dated 07.08.2003 between one Rajpal Singh and the Appellant. The conditions of the agreements which is as follows:- CONDITIONS OF THE AGREEMENT It is hereby agreed and declared by the parties as under: a) The Hirer/s shall always remain liable to repay the Financed Amount as mentioned the Schedule if hereto along with finance charges thereon and all other charges payable under this agreement irrespective of MAGMA taking possession of the said Asset(s) which would form part of the security of MAGMA for recovery of its dues. The said Asset(s) shall be held by the Hirer/s for and on behalf of MAGMA and in trust for MAGMA. b) for the purpose of accruing re-payment of the Financed Amount and all the sums payable hereunder, the Hirer/s hereby transfers/shall be deemed to have transferred the right to possess and use the said asset(s) to MAGMA. c) The Hirer/s has examined (or caused to be examined) the said Asset(s) and satisfied himself as to its operation, condition and running. No warranty and responsibility is implied on the part of MAGMA in respect ....
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.... said asset as Rs. 9,74,857/-, loan amount as Rs. 8,42,000/- payable in 47 installments during the period 01.07.2004 and 01.04.2008. 19. From the ratio laid down by the Hon'ble Supreme Court in Sundaram Finance Ltd.'s case, it is crystal clear that the effect of transaction be determined from the terms of the agreement considered in the light of surrounding circumstances and the court has power to go behind the documents and to determine the nature of transaction whatever may be the form of the documents. An attempt has been made by us to analyze the true nature of the transaction between the Appellant and its customers from the agreements/documents placed before us. Broadly, we find that in almost all the cited agreements/contacts, the Appellant had been approached by the respective customers for procuring/purchasing a vehicle, (except agreement dated 22.03.2000 between the Appellant and M/s.Shiva Cement Ltd. which relate to lease of equipment). We find that the customers were required to pay the amount/value shown in the schedule-II of the agreements in monthly installments for the period specified in schedule-III agreed between the appellant and the customers. We find....
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....on. Therefore, all these agreements need to be scrutinized along with supported evidences/documents which could not be possible at this appellate stage as all the transaction documents are not enclosed with the agreement; besides these agreements were not examined/scrutinized by the original adjudicating authority even though equipped with enough manpower to undertake such a herculean task. In the result, we are of the firm opinion that ascertaining of the facts are vital, to application of the principle of law, in the interest of justice this aspect need to be remitted to the ld. Commissioner for verification of the facts in detail and ascertain the true nature of transaction between the appellant and its customers during the period under dispute and arrive at the conclusion whether the transaction/services falls within the scope of taxable services of banking and other financial services defined at Section 65(12) of Finance Act, 1994. 20. The next important issue needs determination is whether value representing securitization transaction deducted from the total value as non-taxable service for the period 2002-03 & 2003-04 is correct or other wise. The claim of the appellant i....
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....stomers. However, for the subsequent periods, the Appellant had entered into separate servicing agreements for separate consideration on which service tax has been discharged. The grievance of the Revenue, on the other hand is that without due verification of any of the facts the ld.Commissioner has simply allowed the deduction on account of securitization, hence the same is bad in law. 21. The Ld. Spl. Counsel Shri D.K.Acharaya referring to the meaning of securitization mentioned at page 286 of The Economics of Money Banking and Financial. Markets(fifth edition) By Fredric S. Mishkin contended that the process of securitization involves rendering financial services. It reads as: "SECURITIZATION. An important example of a financial innovation arising from improvements in both transaction and information technology is securitization, one of the most important financial innovations in the past two decades. Securitization is the process of transforming otherwise illiquid financial assets (such as residential mortgages), which have typically been the bread and butter of banking institutions into marketable capital market securities. As we have seen improvements in the ability to ....
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....sh. 24. It is also the grievance of the revenue in the appeal filed against the impugned order that while calculating the service tax liability for the period 2004 - 05, 2005 - 06 and 2006 - 07, the adjudicating authority had rejected,the RBI statement figures, without recording any reasoning in this regard. The total taxable value as mentioned and in the show cause notice for 2004-05 was Rs. 8910.56 lakhs, 2005 -06 was Rs. 14143.14 lakhs, and 2006-07 was Rs. 8356.04 lakhs, whereas, the Commissioner, the reduced the value to Rs. 494.55 lakhs, 137.93 lakhs and Rs. 39,37,000/- respectively. 25. In their submission, the appellant supporting the said finding of the Commissioner argued that the Department in its appeal could not place any material to negate the said findings. We do not see merit in the said contention of the appellant, in as much as, while rejecting the computation of the Department based on figures submitted to RBI, the ld. Commissioner has not recorded any observation as to why the said figures be discarded. Any order/finding without reasons is cryptic and it'll be difficult for the appellate authorities to examine the correctness or otherwise of such findin....
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....nt" of the said definition of BAS. The ld. advocate countering the said observation submitted that the collection commission cannot fall under the scope of BAS brought into force w.e.f. 01.07.2003. It is their contention that commission agent involved in the sale and purchase of excisable goods are only liable to pay service tax under BAS and if at all any liability arises as commission agent then it would be after 16,06.2005. In support he has referred to the decision of this Tribunal in the case of S.R. Kalyankrishan Vs.CCE 2008 (9) STR 255 (Tri.-Bang.). 28. From the impugned order we find that the ld.commissioner has not confirmed demand of service tax on the collection commission considering the appellant as a commission agent and the amount received as agency commission but, he has confirmed the demand service tax on such receipts under Clause-(ii) of the Definition of BAS as defined under 65(19) of the Finance act, 1994. It reads as under:- "business auxiliary service" means any service in relation to - (i) ..................................................... (ii) promotion or marketing of service provided by the client; (iv) (iii).................................
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....uting the demand under this category the ld. adjudicating authority has discarded the figures of the RBI statement without recording reasons. Therefore, the ld. Commissioner also should record reasons in computing the demand, in the event it is concluded by him that the said service is taxable. 28. The next issue needs determination is recovery of Rs. 93.00 Lakhs, collected by the Appellant representing the said amount as service tax, under section 11D of the Central Excise Act, 1944 as applicable to Service Tax matters. It is the contention of the Applicant that only an amount of Rs. 7,54,689/- was collected by the Applicant representing service tax and the amount of Rs. 69,52,945/- was collected as contingency deposit. Further, it is argued that that the amount of Rs. 93.00 Lakhs had been arrived by the department erroneously by considering the amount of Rs. 37,78,823/- twice. The adjudicating authority on the other hand observed that even though such claims have been made, but not supported by any evidence. We find merit in the said finding. It has not been substantiated by the appellant as to how the said contingency deposits had been collected from the customers, that is, w....
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.... with reasons on its leviability to service tax. 30. Since most of the issues raised by the assesse and the revenue are remanded for reconsideration, hence, in our considered view, it would be inappropriate to record any observation on the applicability of extended period and penal provisions at this stage when the facts are not clear. The adjudicating authority would be free to decide after analysis of facts/evidences on record and that would be produced in the remand proceeding to arrive at a conclusion on the aspect of limitation and imposition of penalty accordingly Our findings on the issues are summarized as below: (I) The terms of the contract relating to all the agreements claimed to be financial lease, equipment lease, operating lease, hire purchase agreement, hire purchase finance agreements and loan cum hypothecation agreements be analysed/examined along with other relevant documents/evidences to ascertain the true nature of transaction between the appellant and its customers so as to arrive at a conclusion whether the said services fall within the scope of "Banking & other Financial services". (II) The securitization agreements/contracts between the appellan....