TaxTMI 
TaxTMI 
2016 (11) TMI 641
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....78 of Finance Act, 1994, an aggrieved Revenue is before us with the plea to confirm that tax was liable to be paid from 1^st July 2003 as provider of 'business auxiliary service' and to restore penalties. 2. The respondent, M/s Shreenath Motors Pvt Ltd, a car dealer, is also a 'direct selling agent' for banks and financial institutions that provide loans to purchasers of vehicles and receives (a) commission on sale/target incentives, corporate incentives and incentives on spare parts, (b) charges towards pre-delivery inspection (c) charges for free post-sale services and (d) commission from banks and financial institutions. The commission received from M/s Hyundai Motors India Ltd for the period from July 2003 to March 2006 was charged t....
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....inspections', appeal of Revenue is nevertheless, restricted to the setting aside of the demand of tax on commission earned from banks and financial institutions. 4. We have heard Learned Authorised Representative and the Learned Chartered Accountant representing the respondent. Our attention has been drawn to the decision of the Tribunal in South City Motors Ltd v. Commissioner of Service Tax [(2012) 34 STT 142 (New Delhi-CESTAT)] which held that: '11. 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 r....
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....ara 10 above and hold that the service was classifiable under "Business Auxiliary Service" during the relevant period.' 5. We also note that later decisions have placed reliance on the order of the Tribunal in Roshan Motors Ltd v. Commissioner of Central Excise, Meerut [2009 (13) STR 667 (Tri-Del)] which held that '6.1 We have carefully considered the submissions from both sides. Normally vehicles change hands from Maruti Udyog Ltd. to the customers through the authorized dealers. The customers could have paid cash or could have arranged finance independently through any other person. If the third party has arranged the finance to the buyer of the vehicle, the services of the said third party would undoubtedly come under the business ....
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....nged finance to their customers by positioning themselves between the financiers and the customers. This tie up with the finance companies definitely benefits the appellant and at the same it benefits the finance companies more. If it was only to the benefit of the appellant, the finance companies should have charged services charges from the appellant. That is why the finance companies have paid service charges to the appellant. The terms of the agreement together with the fact that the appellant has been paid for the services leads to the conclusion that the appellant is rendering services in marketing rendering the services rendered by the finance companies. 6.4 In similar situations, the Tribunal has held that the finance companies r....