Customs, Excise and Gold Tribunal - Bangalore
Bridgestone Financial Services vs Commr. Of S.T. on 28 July, 2006
Equivalent citations: [2007]6STT97
ORDER S.L. Peeran, Member (J)
1. The appellants are required to pre-deposit Service Tax of Rs. 54,56,783/- and Rs. 1 crore as penalty. The contention of the Revenue is that the assessee is carrying on the activity of Business Auxiliary Services on behalf of the Citibank and were getting reimbursement of the cost for sourcing Home Loans and Personal Loans for Citibank including personnel costs, establishment costs, rent, telephone expenses, salaries of the sales staff, incentives, etc. They were also getting the Monthly Retainer Fee of Rs. 25,000/- each for Home Loans and Personal Loans respectively.
2. The contentions raised by the assessee are two fold. At the outset, it was their submission that the Show Cause Notice does not allege "intention to evade Service Tax" except to say that they have suppressed the facts. The Show Cause Notice is dated 13-10-2005 covering the period July, 2003 to September 2004. Hence, it is submitted that in terms of the Apex Court judgment rendered in the case of T.N. Dadha Pharmaceuticals v. CCE, Madras 2003 (152) E.L.T. 251 (S.C.) and Cosmic Dye Chemical v. CCE, Bombay , the demands are required to be held as time barred if the crucial words "intention to evade duty" is not brought out in the Show Cause Notice.
3. The next leg of the argument is that the activity carried out by the appellants would be covered under the heading "Support Services for Business or Commerce" which has come into force from 1-5-2006. Their further contention is that even if for argument sake, their services are brought within the ambit of the Business Auxiliary Services, even then the duty liability would be only Rs. 1,00,720/- being 8% of the total Monthly Retainer Fee received by them. The amount received for the period is Rs. 12,59,000/- and 8% would work out to Rs. 1,00,720/-, which they are willing to deposit. It is submitted that the Commissioner has not applied his mind on all the contentions raised and the order is not a speaking order. It violates the Principles of Natural Justice. The learned Counsel strenuously argued on all the above propositions raised and submitted that full waiver should be granted to them. The learned Counsel does not plead financial hardship.
4. The learned JDR submits that the Commissioner has applied his mind on all the propositions raised before him and has clearly found the activity coming within the definition of Business Auxiliary Service. The appellants have suppressed the fact of carrying on the activity and, therefore, intention to evade duty is clearly implied and has to be read within those terms and the judgments are distinguishable. He submits that as they have not pleaded financial hardship, they are required to be put to terms. He submits the Revenue has rightly computed the amounts required to be deposited by them.
5. On a careful consideration, we notice that the Show Cause Notice has clearly brought out the facts leading to suppression and, therefore, at this prima facie stage, it cannot be said that the appellants did not have any intention to evade duty. At least they should have informed the Department of their activity which they have admittedly not done so. Therefore, at this stage, the benefit of time bar cannot be given to them while considering the amounts to be fixed for pre-deposit. In so far as the plea that the activity does not come within the ambit of such Business Auxiliary Services is concerned, this is a contentious issue which has to be considered only at the final stage in the light of the definitions and the judgments. The Commissioner has considered this aspect and has overruled their plea. The only point that is required to be considered is with regard to the liability of Service Tax due by them. The appellants had given the working sheet to the Commissioner and the Commissioner ought to have given a clear cut finding on the Service Tax liability. As the appellants have not pleaded financial hardship, we are of the considered opinion that the appellants should pre-deposit an amount of Rs. 5,00,000/- (Rupees five lakhs only) within a period of two months. On such deposits, the balance of the Service Tax and penalty stands waived and recovery stayed. As the amounts are more than Rs. 1.54 crores, the appeal has to be heard out of turn in October. Call on to report compliance on 6th October, 2006. Matter to come up for final hearing on 26th October, 2006. The learned JDR to get para-wise comments on all the submissions raised by the appellants before the final date of hearing.
(Pronounced and dictated in open Court)