Case Law Details
Preet Financial Services Pvt. Ltd. Vs C.S.T.-Service Tax (CESTAT Delhi)
Business model of the appellant was such that they used to get commission from financial institutes for introducing customers. The said financial institutes used to pay commission in a fixed percentage on the loan amount disbursed to the end customer. After this commission, the appellant used to pass on substantial portion thereof to end consumer. When these facts are applied to the definition of Business Auxiliary Services (BAS) as under Section 65 sub-section 19 of Finance Act incorporated vide Notification No. 7/2003-Service Tax dated 20.05.2003 w.e.f. 01.07.2003, we are of the opinion that the nature of above activity of the appellant is promotion on marketing of the services provided by the client. The same very much falls under sub Clause (ii) of 65(19) of the Act. The appellants actually were sourcing customers for the above mentioned banks. The actual agencies which provide the financial service by giving loans are those banks. They are actually the clients of the appellants. Thus, the services of the appellants were very much that in the nature of Business Auxiliary Services.
It is an admitted and apparent fact that since 01.07.2003, the appellant has not discharged the liability. They only got themselves registered under Business Auxiliary Services on 25.10.2004 but the simultaneous fact remains that during the said period (since 01.07.2003 to 10.09.2004), there was a prevalent confusion about the nature of the impugned activities. We have perused the Notification of 06.11.2006 as has been brought to our notice by the Ld. Counsel of the appellant. The perusal thereof makes it clear that since the incorporation of Business Auxiliary Services till the date of this Notification, there were doubts in respect of the activities undertaken by various dealers promoting market for the financial institutes.
In the present case also, the demand is for the period w.e.f. July 2003 to December 2004. The Show Cause Notice was issued on 31.07.2007.
Once there was an apparent acknowledged confusion about the impugned activity, non-discharge of the liability thereof cannot be alleged as an act of suppression of fact with an intent to evade tax. Resultantly, the Department was not entitled to invoke the extended period of limitation. The demand in question therefore is hit being barred by time.
Please become a member. If you are already a member, login here to access the full content.
