2017 (10) TMI 502

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....emand of Service Tax under the category of Business Auxiliary Service has been confirmed against the appellants. 2. The brief facts are that: (i) The appellant viz., M/s. AVG Motors Ltd. (AVGML) and M/s. Indus Motor Company Pvt. Ltd. (IMCPL) are said to be providing Business Auxiliary Services (BAS) in respect of sale of insurance products on behalf of M/s. Maruti Insurance Brokers Ltd. (MIBL) and M/s. Maruti Insurance Agency Network Ltd. (MIANL). (ii) The Department issued show-cause notices No.30/2005 dated 26.7.2005 to AVGML and No.23/2005 dated 12.4.2005 to the appelalnts demanding service tax for providing BAS for and on behalf of MIBL and MIANL. (iii) The show-cause notice (SCN) issued to AVGML was adjudicated vide Order-i....

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....from M/s. Maruti Udyog Ltd. (MUL)/MIBL/MIANL for canvassing loans to buyers of vehicles and they are also engaged in issuing insurance policy of M/s. National Insurance Co. Ltd. on behalf of MIBL, which is a fully owned subsidiary of MUL. These facts are applicable to both the appellants. The appellants admit that they were receiving payments from MIBL for issuing insurance policies to customers and for collection of premium amount. 4.2 The appellants contention is that MUL is paying service tax, and as such, the dealers are not liable to pay any further service tax on the Maruti Finance Dealer pay outs. However, from the facts on record as well as the statements recorded of the appellants, it is clear that the appellants are doing the s....

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....elp the buyers of the vehicles for arranging the finances. For this, they have a tie-up with Banks / Non-banking Finance Companies. The customers are advised by the dealers to approach such financial companies for taking loans. The automobile dealers get commission from such financial companies for directing the customers to the latter. By this activity, the automobile dealers promote or market the services provided by their customer (i.e., the financial institution), and are therefore covered under taxable service , namely, the Business auxiliary service . The tax is payable on the gross commission received by the automobile dealer. In some cases, the dealers share part of their commission with their customers to attract them. However, thi....