TaxTMI 
TaxTMI 
2018 (6) TMI 856
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....es. Based on intelligence, that appellant was not discharging the service tax liability on the activities which fall under the Business Auxiliary Service, show cause notices were issued which after adjudication culminated in confirmation of demand of Rs. 90,46,925/- along with interest for the period July 2003 to March 2006 and also penalties imposed under section 76 besides equal penalty of Rs. One crore under section 78 of the Finance Act, 1994. Hence this appeal. 2. On behalf of the appellant, ld. counsel Shri V.S. Manoj made oral as well as written submissions. Firstly, it is argued that the appellant is a proprietorship concern and not a commercial concern and therefore is not liable to pay service tax under Business Auxiliary Service....
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....he activities carried out by the appellant would fall within the definition of Business Auxiliary Service. It is also argued by the ld. counsel that though the appellant was engaged in collection of overdues from the customers, this is nothing but recovery of installments from defaulted customers. Such an activity would fall within the definition of recovery agent which was brought within the service tax net only with effect from 1.5.2006. Thus, the activity of recovery of installments from defaulted borrowers cannot be classified under Business Auxiliary Service since the more specific description of the activity would fall under „Recovery Agent Service‟ and not Business Auxiliary Service. The ld. counsel has also strongly argu....
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....ting agent, their activity is covered by the definition of Business Auxiliary Service. The adjudicating authority has gone into the details of the agreement entered between the appellant and various banks and financial institutions and analyzed the activities carried out by the appellant. They were engaged in bill preparation, telephone verification, business verification, document verification and negative data based check. After completion of verification, the duly signed verification reports are submitted to the bank to enable the bank to arrive at the decision whether to sanction loan / credit card. Thus, they were engaged in both verification as well as collecting installments and the decision in the case of Katiyil & Associates (supra....
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.... Promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) Promotion or marketing of service provided by the client; or (iii) Any customer care service provided on behalf of the client; or (iv) Procurement of goods or services, which are inputs for the client; or [Explanation, - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client;] (v) Production or processing of goods for, or on behalf of, the client; (vi) Provision of service on behalf of the client; or (vii) A service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or ....
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....e us for the reason that the appellant in Katiyil Agencies was engaged merely in verification of customer credentials. The activity of the appellant herein is not solely or merely verification of credentials of prospective customers but appellants were also engaged in other activities like preparation of invoices / Bills, collection / recovery of installments from the defaulters / borrowers of the bank etc. In our view, these activities are nothing but providing incidental or auxiliary services to HDFC Bank in collecting the overdue installments etc. from the customers of HDFC and would definitely fall within the ambit of Section 65 (19)(iv) of the Finance Act prior to 10.09.1994 and Section 65 (19) (vii) after 10.09.2004. It is also to be ....