M\/s. Benchmark Services Versus Commissioner of GST & Central Excise Coimbatore
Service Tax
2018 (12) TMI 1113 – CESTAT CHENNAI – TMI
CESTAT CHENNAI – AT
Dated:- 18-12-2018
Appeal Nos. ST\/340\/2011 and ST\/41643\/2013 – Final Order Nos. 43117-43118\/2018
Service Tax
Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical)
\nShri M.N. Bharathi, Advocate for the Appellant
\nShri K. Veerabhadra Reddy, ADC (AR) for the Respondent
\nORDER
\nPer Bench
\nBrief facts are that appellants are holding service tax registration under the category of Business Auxiliary Service (BAS). They entered into an agreement with ICICI Bank for rendering activities of collection of instalment \/ loan from the customers of the bank. The department was of the view that the said activity would fall within the category of BAS as defined under Section 65(105)(zzb) of Finance Act, 1994. Show cause notice dated 21.4.2010 was issued for the period 2004 – 05 to December <\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n N. Bharathi submitted that the appellant had entered into an agreement with ICICI bank engaging the appellants to collect the instalments from customers \/ depositers. The said activity comes under Recovery Agent Service which came within the taxable net only with effect from 1.5.2006. The demand prior to this date cannot sustain for the reason that the said activity would not fall under BAS. The demand after 1.5.2006 is not sustainable under BAS since the services would fall under Recovery Agent Service. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n r the activity is subject to service tax or not. Though they raised the invoices showing the service tax separately ICICI refused to pay the tax. Taking note of the fact that ICICI has not paid service tax to appellant, the Commissioner while adjudicating the show cause notice for the earlier period dated 21.4.2010 has given the appellant the cum-tax benefit. These being the facts, the show cause notices are time-barred and the demands cannot sustain. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n fore the demand raised invoking extended period is legal and proper. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n stitution including a non-banking financial company or any other body corporate or a firm, by any person, in relation to recovery of any sums due to such banking company or financial institution, including a non-banking financial company, or any other body corporate or a firm, in any manner;” = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n However, the show cause notice for the period from 2004 – 05 to 2009 – 10 has been issued only on 21.4.2010. Further, it is seen from the receipts that the ICICI bank has not paid service tax. The Commissioner has quantified the liability of service tax after giving cum-tax benefit. The appellant had not been paying service tax only for the reason that they were under the bonafide belief that the said services are not subject to levy of service tax. Even after seeking clarification from the department, since they did not receive any reply, they have opted not to pay the service tax believing that these services are not taxable. Though the department alleges that the appellant is guilty of suppression of facts, there is no evidence brought forth as to what is the positive act committed on the part of the appellant. The various documents show that the appellants have furnished the entire documents as requested by the department. In fact, the demand has been quantified basing upon the do<\/p>\n = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" M\/s. Benchmark Services Versus Commissioner of GST & Central Excise CoimbatoreService Tax2018 (12) TMI 1113 – CESTAT CHENNAI – TMICESTAT CHENNAI – ATDated:- 18-12-2018Appeal Nos. ST\/340\/2011 and ST\/41643\/2013 – Final Order Nos. 43117-43118\/2018Service TaxMs. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu Mohan Damodhar, Member (Technical) Shri M.N. Bharathi, Advocate for the Appellant Shri K. … Continue reading “M\/s. Benchmark Services Versus Commissioner of GST & Central Excise Coimbatore”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-15619","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15619","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15619"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/15619\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15619"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15619"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15619"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n2.2 It is further submitted by him that the appellant had not received any service tax from ICICI bank as the bank was of the view that the said activity carried out by appellant is not liable to service tax. The appellant had informed the Assistant Commissioner of Central Excise vide letter dated 10.11.2005 intimating this fact. In the said letter, the appellant had intimated that the ICICI bank was refusing to pay service tax contending that the activity of the appellant of recoveri<\/p>\n
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\n2.3 With regard to the demand on reimbursable expenses, he submitted that these were actual expenses incurred by the appellant for obtaining demand drafts, courier charges, telephone charges, travelling expenses etc. Being reimbursable expenses, they are not subject to levy of service tax during the relevant period as decided by the Hon'ble Supreme Court in the case of Union of India Vs. Intercontinental Consultants and Technocrats P. Ltd. – 2018 (3) TMI 357 (SC).
\n2.4 Without prejudice to the above submissions, he submitted that the is<\/p>\n
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\n4. Heard both sides.
\n5.1 The first contention put forward by the ld. counsel for the appellant is that the activity of collecting amounts from the customers \/ defaulters would not come under BAS prior to 1.5.2006. Undisputedly appellants are acting in the capacity of collecting agents for ICICI Bank and they collect the dues payable by customers to such Banks on behalf of the Banks. The definition of BAS under Section 65(19) of the Act is reproduced as under:-
\n“Business Auxiliary Service” means any service in relation to, –
\n(i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or
\n(ii) promotion or marketing of service provided by the client; or
\n(iii) any customer care service provided on behalf of the client; or
\n(iv) procurement of goods or services, which are inputs for the client; or
\n[Explanation. – For the removal of doubts, it is hereby declared that for the p<\/p>\n
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\nThough the services fall under Recovery Agent Service, the demand has been raised under BAS which in our view is incorrect. In S.K. Associates Vs. Commissioner of Central Excise, Salem vide Final Order No. 42043 to 42046\/2017 dated 11.9.2017, the Tribunal had analysed the scope of activities that would come under BAS. In the said case, the assessee therein was engaged by ICICI bank to canvass prospective customers to perform the work from the stage of obtaining the application from prospective customers, processing such application, verify, undertake file sourcing till disbursement of loan. Such activities would fall under BAS even after 1.5.2006. As per the agreement dated 28.1.2005, the appell<\/p>\n
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