Custom, Excise & Service Tax Tribunal
M/S. Auto World vs Cce, Allahabad on 17 April, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, WEST BLOCK NO. 2, R.K. PURAM, NEW DELHI COURT III SERVICE TAX APPEAL NO. 203 OF 2008-SM [Arising out of Order-in-Appeal No. 72/ST/ALLD/2007 dated 4.1.2008 passed by the Commissioner (Appeals), Central Excise, Allahabad] For approval and signature: Honble Mr. P.K. Das, Member (Judicial) 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 would 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. Auto World Appellant Vs. CCE, Allahabad Respondent
Appearance:
Shri Tushar Agarwal, Advocate for the Appellant; Shri R.K. Verma, D.R. for the Revenue Coram:
Honble Mr. P.K. Das, Member (Judicial), Date of hearing/decision: 17th April, 2009 FINAL ORDER NO._________________ dated __________ Per P.K. Das:
Learned Advocate submits that the appellants were arranging loan on behalf of financial institutions and receiving commission thereon. He submits that there was doubt regarding levy of tax on commission received by the automobile dealers which was clarified by the Boards Circular No. 87/05/2006-S.T. dated 06.11.2006. He further submits that in the month of July, 2003 Business Auxiliary Services were introduced for payment of tax on promotion of business. He also submits that as soon as it came to their knowledge, they voluntarily paid the tax in the month of December, 2004 for the period July, 2003 to December, 2004. By show cause notice dated 30.2.2006 tax was demanded to the tune of Rs. 90,783/- and to appropriate the amount, which the appellants already deposited in December, 2004 and also to impose penalty under Section 75A, 76, 77 & 78 of the Finance Act, 1994. He also submits that the balance amount of tax was deposited before issue of the adjudication order. Therefore, penalty imposed under Section 75A, 76, 77 & 78 of the Finance Act, 1994 are not sustainable. He relied upon the following decisions of the Tribunal:-
(a) Modern Machinery Store vs. CCE, Jaipur-I, reported in 2008 (12) S.T.R. 162 (Tri.-Del.);
(b) Vipul Motors (P) Ltd. vs. CCE, Jaipur-I, reported in 2008 (9) STR 220 (Tri.-Del.)
2. Learned D.R. reiterates the findings of the Commissioner (Appeals). He submits that tax was levied in July, 2003. They have not obtained registration under service tax law during the relevant period. He also submits that the fact of rendering taxable service by the appellant was not disclosed. He also submits that on inquiry the Central Excise officers detected the fact of non-payment of tax.
3. After hearing both sides and on perusal of the records, it apepars that there was doubt regarding levy of tax on commission by the authorized automobile dealers which working as directing marketing agent of ICICI Bank for providing services to various customers for purchasing vehicles on loan, was clarified by the Boards circular dated 06.11.2006. In the present case, the appellants were engaged in providing service to different customers who were purchasing vehicles by getting loan from financial institutions and the appellants were receiving commission on the loan arranged by them. It is seen that the appellants paid the tax in December, 2004 partly. There is no mala fide on part of the appellants and, therefore, imposition of penalty under Section 78 of the Finance Act, 1994 is not warranted. It is noticed that service tax was introduced on the activities of the appellants in July, 2003 and the appellants paid the tax voluntarily in December, 2004 with interest. After considering the facts and circumstances of the case, I find that the dispute relates to new levy and the appellant paid the tax partly before issue of show cause notice and the balance amount before issue of Adjudication Order. Payment of tax was not disputed by them. Hence, it is a fit case to invoke Section 80 of the Act. Hence, penalty imposed on the appellant are set aside. Demand of duty is upheld. Appeal is allowed with consequently relief.
(Dictated & pronounced in the Open Court.) (P.K. DAS) MEMBER (JUDICIAL) RK