TaxTMI 
TaxTMI 
2017 (5) TMI 102
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....,545/- along with interest of Rs. 1,85,435/- during the course of investigation itself. The service tax liability is under the category of "Business Auxiliary Service" in terms of Section 65(19) of Finance Act, 1994. A show cause notice dated 31.07.2007 was issued to the appellant for demanding service tax of Rs. 24,50,797/- and proposing imposition of penalties for alleged willful suppression of material facts. 3. The Original Authority decided the case and passed the order dated 20.08.2008. The Original Authority confirmed the service tax demand of Rs. 24,59,565/- and also recorded that the appellant deposited the service tax along with interest during the course of investigation itself. However, no relief was given for the amount excess paid by the appellant. The Original Authority also imposed penalty of equivalent amount under Section 78 and Rs. 1,000/- under Section 77 of the Finance Act, 1994. On appeal, the impugned order upheld the original order, except for reduction of demand to Rs. 24,50,797/- with corresponding reduction in penalty imposed under Section 78. 4. The appellant, represented by Shri J.K. Mittal, ld. Advocate, contested the proceedings before the lower aut....
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....be given retrospective effect. (e) As there is no ground for invoking demand for extended period, there is no justification in imposing penalty under Section 78 of the Act. The service tax along with interest has been paid long before the issue of show cause notice and as such, the penal proceedings against the appellant are not sustainable. (f) Section 80, which provides for waiver of penalty, when reasonable cause is shown for non-payment of service tax in time, is rightly applicable to the present case. (g) The amount has been paid by the appellant under influence from the Department. As the appellants are not liable to pay service tax, the amount should be refunded, with interest to them. 5. Shri Sanjay Jain, ld. AR supported the findings of the lower authorities. He submitted that the appellants were providing taxable service under the category of "Business Auxiliary Service". The appellants are acting as direct selling agent/direct marketing agent, Standard Chartered Bank, HDFC Banks, Citi Bank, ICICI Bank and some non-banking finance companies (NFFC) like GE Countrywide etc. For this purpose, the appellants have entered into contract with such banks. In terms of the c....
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....relation services, management or supervision, and includes services as a commission agent, but does not include any information technology and any activity that amounts to "manufacture" within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944. Explanation - For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) "Commission Agent" means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person - (i) deals with goods or services or documents of title to such goods or services; or (ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services; (b) "Information technology service" means any service in relation to designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer syste....
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....onclusion, we may refer to the decision of the Tribunal in Jay Bharat Automobiles - 2016 (41) STR 311 (T-M). The Tribunal held that the appellants bring in customers for the banks and the banks provide financial services to the customers. Undoubtedly, this activity falls under Clause (ii) i.e. promotion or marketing of service provided by the clients. The Tribunal referred to the earlier decisions in Roshan Motors Ltd. - 2009 (13) STR 667 (T- Delhi) and Bridge Stone Financial Services - 2007 (8) STR 505 (T-B). The reliance placed by the appellant on the Hon'ble Supreme Court's decision in Suchitra Components Ltd. - 2007 (208) ELT 321 (SC) is not appropriate. The tax liability of the appellant is not created by the circular dated 6.11.2006. The tax liability is in terms of statutory provisions under Section 65(19) of Finance Act, 1944. There were circulars of the Board clarifying the scope of service tax entry earlier to 2006 also, as mentioned earlier in this order. In view of the above analysis, we find that the appellants are liable for service tax under the category of "Business Auxiliary Service" during the material time. 12. Now, we consider the correctness of issue of show c....
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....ax liability by the appellant with interest, the matter should have been closed in terms of Section 73(3). As such, we find that proceedings initiated against the appellant to appropriate already paid tax with interest and to impose penalty is not warranted. 14. The appellants claimed that the amount has been paid under influence of the department and the same has to be refunded to them. We find no merit for such a claim. It is clear that the appellants have contested the show cause notice and subsequent proceedings by relying on the provisions of sub-section 73(3). We have examined the tax liability of the appellant and came to the conclusion to the effect that they are liable to service tax under the category of "BAS". The appellants have discharged the service tax under the said category along with interest for delayed payment and also filed ST-3 returns. The service tax payable on taxable activities has been duly paid under proper heading and credited to the Government. No protest has been recorded by the appellant at the time of payment of service tax. As such, we find that the tax paid by the appellant in respect of taxable consideration received during the material time are....