M/S Shreya Financial Services vs C.C.E., Kanpur
- CitationService Tax Appeal No. 1173 of 2010 and 1174-1175 of 2010
Ratio decidendi
The rule this decision rests on
Services of arranging loans for banks, for which the service provider receives commission from the bank, constitute promotion or marketing of services provided by the client and are therefore classifiable as Business Auxiliary Services under clause (19) of Section 65 of the Finance Act, 1994. A service provider who renders services to customers on behalf of a bank, acting only as the bank's agent, is not entitled to the small scale exemption, since the services are rendered as branded services on behalf of another service provider.
Written by Miss Lucy from the judgment below, not taken from a headnote.
Judgment
As delivered
(Arising out of the Order-in-Appeal No. 266/ST/APPL/KNP/2010 dated 18/05/2010 passed by the Commissioner of Central Excise, Kanpur).
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?
M/s Ishwar Consultant ]
M/s Shreya Financial Services ] . Appellant
Shri Sanjeev Upadhyay ]
vs.
C.C.E., Kanpur .. Respondent
Appearance:
None - for the appellant
Shri B.B. Sharma, A.R. for the Respondent/Revenue
Coram: Honble Mr. Justice G. Raghuram, President
Honble Mr. H.K. Thakur, Technical Member
Final Order No. 52214-52216/2015 dated 10/07/2015
Per. H.K. Thakur :-
Service Tax appeal No. ST/1173/2010 has been filed by M/s Ishwar Consultant against OIA No. 266/ST/APPL/KNP/2010 dated 18/05/2010. Appeals No. 1174/2010 and 1175/2010 have been respectively filed by M/s Shreya Financial Services and Shri Sanjeev Upadhyay against OIA No. 267-269/ST dated 18/05/2010.
2. None appeared on behalf of the appellant M/s Ishwar Consultant when notice was issued on 15/6/2015. There is no request for adjournment of personal hearing. Similarly, in the case of appellants M/s Shreya Financial Services and Shri Sanjeev Upadhyay none appeared. As the issue involved in all these appeals is the same, therefore, the same are taken up together for disposal under this common order.
3. Heard learned (AR) and perused the case records. The issue involved in these appeals is whether the commission received by the appellants from the banks is chargeable to service tax under Section 65 (19) of the Finance Act, 1994 under Business Auxiliary Services. Second issue involved in these appeals is whether small scale exemption will be admissible to the appellants or not. So far as classification of the services undertaken by the appellants is concerned, the definition given under Section (19) of the Finance Act, 1994 is as follows :-
As per Clause (19) of Section 65 of the Finance Act, 1994, the term Business Auxiliary Service has been defined as any service in relation to
(i) promotion or marketing or sale of goods produced or provided by or belonging to the client ; or
(ii) promotion or marketing of service provided by the client; or
(iii) any customer care service provided on behalf of the client; or
(iv) procurement of goods or services, which are input for the client, or
(v) production or processing of goods on behalf of the client.
(vi) Provision of the service on behalf of the client.
(vii) A service incidental or auxiliary to any activity specified in sub-clause (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision and includes services as a Commission Agent but does not include any information technology service and any activity that amounts to manufacture within the meaning of clause (f) of Section 2 of the Central Excise Act, 1944.
4. In view of the above definition services provided by these appellants as a Commission Agents are classifiable as Business Auxiliary Services. From the case records it is observed that the appellants are arranging loans for the banks and thus promoting marketing the services provided by the Banks and are paid commission on such services from the bank. These activities have been correctly held to be classifiable under Business Auxiliary Services and we do not find any reasons to interfere with the orders passed by the First Appellate Authority.
5. So far as admissibility of small scale exemption notification is concerned, the services are provided to the customers on behalf of the banks and appellants are only acting as an agent of service provider. Accordingly, admissibilities of small scale benefit has been rightly denied by the First Appellate Authority as appellants are providng branded services on behalf of the banks.
6. In view of the above, appeals filed by the appellants are dismissed.
(Operative part of the order pronounced in the open court.)
andl
(Justice G. Raghuram)
President
(H.K. Thakur)
Technical Member
PK
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