2025 (11) TMI 859

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....I), Chennai. 2. Brief and relevant facts as could be gathered from the impugned order and upon hearing both sides are that, the Appellant are functioning as an outsourcing agency for various banks and financing companies. They assisted the Banks and Finance companies in evaluating the customers and collecting payments from defaulters on behalf of the Banks. It was thus contemplated that the said activity is covered under the taxable service of Business Auxiliary Service. Hence, periodical Show Cause Notices were issued for the period up to 2009-10. Further, another Show Cause Notice proposing to demand Service Tax of Rs.24,85,489/- on the charges collected for the above said activity covering the period from April 2010 to March 2011 was ....

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....entax 352 (Tri.-Mad) * Kalpataru Power Transmission Ltd Vs. CCE (2022) 1 Centax 56 (Tri.-Ahmd) * Sharma Travels Vs. CCE (2017) 52 STR. 272 (Tri. - Del.)  * TKM Global Logistics Ltd. Vs. CST (2024) 17 Centax 35 (Tri.-Cal) 4.2 Further, the Appellant does not provide any service to the customers of the bank on behalf of the bank. The verification of the customers' details and collection of payment are services provided to the bank and not to the bank customers. Therefore, the service cannot be classified under Section 65(19)(vi); 4.3 The Order-in-Original confirms the demand by classifying the service under Section 65(19)(vii) read with Section 65(19)(ii&vi) though the said clauses have not been mentio....

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....i. -Del.) 6. Heard both sides. 7. Perusal of Show Cause Notice reveals the following:- 2.3 Thus, in view of the above provisions, it appears that the said services of the assessee in evaluating the customers for Banks / Finance Companies and collection of payments from defaulters on behalf of the Banks & Financial Institutions is covered under the category of "Business Auxiliary Service" and therefore it appears that the assessee are liable to pay Service Tax on the service charges realized from such Banks and Financial Institutions. In this connection, a reference is made to Section 65(19) of the Finance Act 1994, relating to Business Auxiliary Service, the authority has specifically omitted (i) to (vi) and extracted (vii....