Custom, Excise & Service Tax Tribunal
Gemini Mobiles Pvt. Ltd vs C.C.E & S.Tax, Lucknow on 8 July, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, CIRCUIT BENCH AT ALLAHABAD Date of hearing/decision: 8.7.2015 Service Tax Appeal Nos.444, 445 of 2010 Arising out of the order in appeal No.39/ST/LKO/2010 and 36/ST/LKO/2010 dated 19.2.2010 passed by the Commissioner, (Appeals), Central Excise, Service Tax, Lucknow. For approval and signature: Honble Mr. Justice G. Raghuram, President Honble Mr. H.K. Thakur, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of 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? Gemini Mobiles Pvt. Ltd. .. Appellants Sunny Motors Pvt. Ltd Vs. C.C.E & S.Tax, Lucknow .. Respondent
Appearance:
Present Shri Vineet Kumar Singh, Advocate for the appellants Present Shri B.B. Sharma, A.R. for the respondent Coram: Honble Mr. Justice G. Raghuram, President Honble Mr. H.K. Thakur, Technical Member Final Order No. 52170 52171/2015 Per Justice G. Raghuram:
Heard Shri Vineet Kumar Singh, Ld. Advocate for the appellants and the ld. A.R. for the respondent/Revenue.
2. These appeals are preferred against distinct adjudication orders dated 9.6.2009 and 1.7.2009 passed by the Deputy Commissioner , Central Excise , Division I, Lucknow confirming distinct demands of service tax, interest and penalties against each of the appellants, for having provided Business Auxiliary Service (BAS) during the gross period July 2003 to November, 2005. The appellants are dealers of cars of different brands. Appellants were also facilitating availment of loans by customers from Banks and financial institutions, with whom they entered into arguments for the purpose. The commission received by the appellants from banks and financial institutions was considered as a consideration received for rendition of Business Auxiliary Service, i.e. providing services on behalf of the banks/financial institutions, concerned. The proceedings culminated in the impugned adjudication orders, after due process.
3. Appellants preferred appeals which were rejected by the Commissioner (Appeals), Customs, Central Excise and Service Tax, Lucknow, by the impugned orders.
4. The issue whether the activities pursued or services provided by the dealers of motor vehicles in such circumstances fall within the ambit of BAS defined in Section 65(19) and enumerated to be a taxable service in Section 65(105)(zzb), was the subject matter of conflicting decisions. Some decisions ruled that such activities fall within BAS while other decisions ruled to the contrary.
5. The conflicts came up for consideration before a Larger Bench in Pagariya Auto Center vs. C.C.E., Aurangabad and the legal position was clarified by the order dated 12.9.2013 reported in 2014 (33) STR 506 (Tri-LB). The Larger Bench answered the reference observing that the large number of decisions cited at the bar and in the order of reference to it, spelt out uniform principle to guide determination of whether a particular transaction involving an interface between an automobile dealer and a bank or a financial institution would per se amount to BAS. The Larger Bench clarified that identification of the transaction and its appropriate classification as BAS or otherwise must depend upon a careful analysis of the relevant transactional documents and only such scrutiny and analysis would ensure a rational classification of the transaction. The Tribunal pointed out that where mere space is provided along with furniture for facilitating accommodation of representatives of financial institutions in the premises of an automobile dealer and consideration is received for that singular activity, such consideration may perhaps constitute a rent for the provision of space and associated amenities and such transaction would not amount to BAS. Alternatively, held the Tribunal, if the transactional documents and other material on record indicate a substantial activity falling within the contours of any of the integers of the definition of BAS, spelt out in Section 65(19), then it would be legitimate to conclude that BAS is provided.
6. In the light of the Larger Bench ruling clarifying contours of BAS, in respect of transactions involving automobile dealers and banks or financial institutions, there was a bona fide doubt as to whether appellants herein had provided BAS during the relevant period in issue. Therefore non-filing of returns and non-remittance of tax for rendition of BAS could not be characterised as arising with a view to suppression of material facts or failure to remit tax with an intent to evade the same, inviting application of the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994.
7. The period in issue in the present appeals is July 2003 to November 2005. Show cause notice was issued on 31.1.2006. Only part of the period is therefore within the normal period of limitation. In the light of the fact that there were conflicting decisions of the Tribunal which stood resolved by the Larger Bench decision in Pagariya Auto Center (supra), we are satisfied that invocation of the extended period was not justified. We so declared the position. The appellants are however liable to tax, interest and penalties for the normal period of limitation specified in Section 73.
8. We therefore set aside the respective orders-in-appeal, confirming the respective adjudication orders and remand the matter to the primary adjudicating authority for re-determination of the appellants liability to tax, interest and penalties for the normal period of limitation, if at all, after proper classification of the transaction in issue in the light of the decision and clarifications issued in Pagariya Auto Center (supra) and after issuing notice to the appellants herein intimating the date for personal hearing. No costs.
(Justice G. Raghuram) President (H.K. Thakur) Technical Member scd/ 1