2018 (11) TMI 1220 – CESTAT CHENNAI – TMI – Business Auxiliary Services – appellants were receiving commission from the financial institutions – appellant have not obtained registration and not paid service tax – Held that:- The issue requires to be remanded to the adjudicating authority for the reason that the respondent has argued that the department has not looked into any other document except the document respondent has entered with ICICI Bank. All the documents on which the demand has been raised have to be looked into.
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Penalties – Held that:- The issue had travelled upto the Larger Bench of the Tribunal. Being an interpretational issue, the respondent has put forward reasonable cause to set aside the penalties and no penalty can be imposed on the respondent – penalty cannot be imposed.
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Appeal allowed by way of remand. – ST/CO/2 & 3/2012 and ST/537 and 538/2011 – Final Order Nos. 42350-42351/2018 – Dated:- 3-9-2018 – Ms. Sulekha Beevi C.S., Member (Judicial) And Shr
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stitutions. Department was of the view that the respondent has provided Business Auxiliary Service (BAS) as appellants were receiving commission from the financial institutions. Show cause notices were issued for the period October 2003 to September 2008 as well as for October 2008 to July 2009. After due process of law, the original authority confirmed the demand raised under BAS along with interest and imposed penalties. Against this, the respondent filed appeals before Commissioner (Appeals), who allowed the appeals holding that the said activity does not fall under BAS. Hence department is now before the Tribunal. 3. The ld. AR Shri S. Govindarajan supported the grounds filed in the appeal. He submitted that the respondents have tie-up with banks / financial institutions and customers who approach to buy consumer durables are able to avail loan from such banks / financial institutions. By this activity they were promoting the business of such financial institutions. The respondents
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CI bank and has not looked into any other document. Further, the service tax liability is required to be paid on receipt basis whereas the Order-in-Original seeks to confirm the demand based on accruals in the books of accounts of the respondent. Though this was pointed out and brought to the notice of the department, the same was not considered. That in some instances, the accruals were reversed as there was no hope of realizing the amount accrued. The department has not considered the plea of the respondents. He argued that the demand has to be restricted based on service charges received and not accrued. To support his contention, he relied on the decision of the tribunal in La Freightlift P. Ltd. Vs. Commissioner of Service Tax, Chennai – 009 (1) STR 513 (Tri. Chen.). The ld. counsel also argued to set aside the penalties. He submitted that the issue was interpretational one and that it had travelled upto the Larger Bench. In fact, the Commissioner (Appeals) had set aside the deman
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on which the demand has been raised have to be looked into. We are of the view that the respondent has to be given a chance to establish their case by furnishing further evidence if necessary. Another reason for remand is that the adjudication order seeks to confirm the demand on accrual basis whereas during the relevant period, service tax is required to be paid on receipt basis. This aspect also requires verification for quantification of the demand if any. In the event, we find that the issue requires to be remanded to the adjudicating authority for fresh consideration and for considering whether the issue laid down in Pagariya Auto Center (supra) applies to the facts of the case are not. 7. The ld. counsel for respondent has argued to set aside the penalties. As narrated above, it can be seen that the issue was contentious and there were conflicting decisions. The Commissioner (Appeals) had set aside the demand. The issue had travelled upto the Larger Bench of the Tribunal. Being a
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