Custom, Excise & Service Tax Tribunal
M/S.K.P.Automobiles Pvt.Ltd vs Cce, Jaipur-I on 7 September, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Service Tax Appeal No.80 of 2008-ST
(Arising out of Order-in-Appeal No.198 (RKS)ST/JPR-I/2007 dt.14.11.07 passed by the Commissioner of Customs & Central Excise (Appeals), Jaipur)
Date of Hearing/decision: 07.09.2011
For approval and signature:
Honble Mrs.Archana Wadhwa, Member (Judicial)
Honble Mr.Rakesh Kumar, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3
Whether Their Lordships wish to see the fair copy of the Order?
4
Whether Order is to be circulated to the Departmental authorities?
M/s.K.P.Automobiles Pvt.Ltd. Appellant
Vs.
CCE, Jaipur-I Respondent
Present for the Appellant: Shri Alok Kothari, Advocate
Present for the Respondent: Shri S.N.Singh, JCDR
Coram: Honble Mrs.Archana Wadhwa, Member (Judicial)
Honble Mr.Rakesh Kumar, Member (Technical)
ORDER NO._______________
PER: ARCHANA WADHWA
The demand of service tax of Rs.9,81,443/- stands confirmed against the appellants alongwith imposition of penalty of an identical amount under section 78 of the Finance Act, 1994. In addition a penalty of Rs.100/- per day stands imposed under section 76 of the said Act.
2. After hearing both sides, we find that the demand stands confirmed and penalty imposed upon the appellants on the ground that the activity of arranging finances/loans for their car customers from various banks and financial institutions, for which they were receiving the commission from the banks, amounts to providing of services falling under the category of business auxiliary services.
3. Learned JCDR appearing for the Revenue does not dispute the confirmation of the demand of service tax. Inasmuch as the issue stands decided by the various decisions of the Tribunal in the case of CCE vs. R.S.Financial Services reported in 2008 (9) STR 231 and also in the case of CCE vs. Chambal Motors reported in 2008 (9) STR 275, it stands held that arranging of vehicle loan from the financial institutions gets covered under the category of business auxiliary services. However, it is the contention of the learned Advocate that the issue involved is of bonafide issue of interpretation of law and as such does not call for interpretation. In the above proposition, he placed reliance on the Tribunals decision in the case of Roshan Motors Ltd. vs. CCE, Meerut reported in 2009 (13) STR 667 and many other subsequent decisions.
4. We note that in the case of Roshan Motors Ltd. referred to (supra), the Tribunal while holding that such arranging of loans for the customers purchasing cars from the dealers amounts to providing of business auxiliary services. However, in para 7 of the judgement it is held as under:-
The submission by the learned advocate that this is a case of interpretation of the taxing entry and no mala fide or element of suppression or mis-statement is involved and, therefore, imposition of penalty under Section 76,77 7 87 is not warranted is acceptable. In view of fact that the case involved interpretation of question of law, we hold that this is not fit case for imposition of penalty. Therefore, the penalties imposed are set aside.
5. As the Tribunal has held that the issue involved is of interpretation of the taxing entry and no mala fide or element of suppression or mis-statement can be attributed to the assessee and hence set aside the imposition of penalties. By following the said decision, we set aside the imposition of penalty upon the appellants.
6. The appeal is disposed of in the above terms.
(Pronounced in the open court) (ARCHANA WADHWA) MEMBER (JUDICIAL) (RAKESH KUMAR) MEMBER (TECHNICAL) mk 5