Decided on February 05,2015

Commissioner Of C. Ex., Mumbai Appellant
Usl Shinrai Automobiles Ltd. Respondents


M.V.RAVINDRAN,J - (1.)THESE two appeals are disposed of by a common order as Revenue and appellant/assessee both are in appeal against the same impugned order.
(2.)The relevant facts that arise for consideration are the appellant/assessee is a dealer of motor vehicles and was facilitating customers to avail loan for purchase of vehicles from the reputed banks/financial institutions and was getting an amount as commission/incentive of the total amounts of loan disbursed from the said banks/financial institutions. Revenue authorities are of the view that the appellant/assessee is required to discharge the service tax liability on this amount under the category of "Business Auxiliary Services" with effect from 1 -7 -2003. Show cause notices were issued to the appellant/assessee. Appellant/assessee contested the issue on merits as well as on limitations. The adjudicating authority did not agree the contentions raised and confirmed the demands with interest and imposed penalties. In the interim period, appellant had discharged the service tax liability for the entire period. Revenue is in appeal against the impugned order on the ground that the penalty imposed by the adjudicating authority under Section 76 of the Finance Act, 1994 is incorrect while the assessee/appellant is contesting the issue on merits.
Learned Counsel appearing on behalf of the appellant/assessee takes us through the records. It is his submission that the service tax liability fastened upon the appellant is incorrect inasmuch as the C.B.E. & C. in their Circular dated 6 -11 -2006 has specifically stated that there were doubts as to taxability of the amounts received as commission from financial institutions. He would submit at the most the Revenue can claim the service tax liability from the date on which C.B.E. & C. clarified service which are rendered by the appellant. He would also submit that he is raising an important question of law as to tax liability which has been worked out by the lower authorities is on the entire amounts of the commission received by the appellant while the said amount needs to be considered as cum -tax amount. He would submit that since the issue involved in this case is prior to the period of C.B.E.&.C. Circular dated 6 -11 -2006, penalties which have been imposed by the adjudicating authority be set aside.

(3.)LEARNED DR on the other hand would submit that appellant has not contested the taxability or the tax paid, before the adjudicating authority and has discharged the entire service tax liability. He draws our attention to the findings recorded by the adjudicating authority. It is his submission that appellant had not intimated the department regarding the activities undertaken by them as to receipt of commission from the banks/financial institutions. He would submit that the activities very clearly fall under the category of business auxiliary services inasmuch as the appellant is promoting the business of banks/financial institutions. As regards the appeal filed by the Revenue; it is his submission that the adjudicating authority has imposed penalty of Rs. 100/ - per day under Section 76 of the Finance Act, 1994 while the said section specifically provides for imposition of penalty of Rs. 200/ - per day or 2% per month whichever is higher.

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