CESTAT, AHMEDABAD BENCH
Rajesh Auto Finance
Commissioner of Central Excise
ORDER NOs. A/263-266/WZB/AHD OF 2012
APPEAL NOS. ST/388,389,502 & 503 OF 2010
FEBRUARY 24, 2012
1. All these four appeals are arising out of an Order-in-Appeal No. 323 to 324/2010/COMMR(A)/CMC/RAJ, dt. 12.07.10. The assessee is aggrieved by the said Order-in-Appeal and is in appeal before the Tribunal in appeal Nos. ST/388 & 389/10 and Revenue is in appeal aggrieved by the same order in appeal Nos. 502 & 503/10. Since the issue involved in these appeals are arising out of the very same Order-in-Appeal, they are being disposed of by a common order.
2. Heard both sides and perused the records.
3. The issue involved in this case is regarding the service tax liability on the assessee M/s. Rajesh Auto Finance/Shri Rajesh Biharilal Gandhi on the ground that the appellant had provided the services would fall under the category of business auxiliary services during the period 09.07.2004 to 31.03.2007 and has not discharged the service tax liability. It is undisputed by the appellant M/s. Rajesh Auto Finance that having provided the services of helping the financee/bankers in financing the vehicle purchasers and they were getting a commission. It is also submitted by the Ld. Counsel that they are not challenging the service tax liability having discharged the service tax liability and also interest thereof. It is his submission that they are only challenging the imposition of penalty on them under sections 77 & 78 while Revenue is in challenge for non-imposition of equivalent amount of penalty under section 78 and setting aside of penalty under section 76.
4. On careful consideration of submissions made by both sides, I find that the issue involved in this case is regarding the bona fide belief of the assessee during the relevant period. During the relevant period, the activity of receiving commission from the bankers for providing the help of identifying the purchasers of the vehicles and completing all the formalities was in dispute before the Tribunal. The said dispute got settled against the assessee. In my considered view, the appellant M/s. Rajesh Auto Finance/Shri Rajesh Biharilal Gandhi would have entertained a bona fide belief that the services rendered by them are not liable to service tax under the category of business auxiliary services. In my view, this is a fit case to invoke the provisions of section 80 of the Finance Act, 1994. Accordingly, I invoke the provisions of section 80 as there is a substantial justification for non-discharge of service tax liability on a bona fide belief, I allow the appeals filed by M/s. Rajesh Auto Finance and Shri Rajesh Biharilal Gandhi to the extent imposition of the penalties imposed on them and reject the appeals filed by the Revenue for non-imposition of penalties.
5. All the four appeals are disposed of as indicated hereinabove.