SAHARA INDIA Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) ALONGWITH the appeal, the Appellant has also moved stay -application for stay of realization of service tax demand of Rs. 80,99,58,723/ - in respect of business auxiliary service held to have been provided by the Appellant as an agent of M/s. Sahara India Financial Corporation Ltd. (hereinafter referred to as SIFCL). On the demand raised, interest was also levied under Section 75 of Finance Act, 1994. So also there was levy of penalty under Section 76 of the said Act which is equal to the amount of service tax demanded above. Added to that, penalty of Rs. 1,000/ - was imposed under Section 77 of the said Act. A penalty of Rs. 80,99,58,723/ - was also imposed under Section 78 of Finance Act, 1994.

(2.) EXAMINING the terms of the agreement between the parties, ld. Adjudicating Authority framed following issues for determination in para 18 of OIO at page 23 which reads as under:

(3.) THE issues framed as above were decided by the ld. Adjudicating Authority in terms of paras 19 to 23 of OIO appearing at page 23 to 39. While examining the issues before him, pleadings of the Appellant were also considered by ld. Adjudicating Authority. Crucial question being whether service provided by the Appellant was falling under the category of "Business Auxiliary Services", the authority below also tested the facts of the Appellant in terms of law prevailing for the periods 1 -7 -2003 to 17 -4 -2006, 18 -4 -2006 to 30 -7 -2006, 1 -7 -2003 to 9 -9 -2004 and 10 -9 -2004 to 16 -6 -2006. In para 22 of OIO, she found that there was active involvement of the Appellant to fulfil the objects of the agreement by its employees for getting prospective depositors and apprising the scheme to the customers promoted deposit schemes. Such act was considered by her to be "Business Auxiliary Services" provided by the Appellant as a commercial concern in terms of provisions of law in the Finance Act, 1994. Learned Adjudicating Authority also found that commission was paid by SIFCL to the Appellant as consideration for "Business Auxiliary Services" provided by the Appellant. Therefore in para 22.1 of Adjudication Order, ld. Adjudicating Authority came to the conclusion that the Appellant provided "Business Auxiliary Services" to SIFCL for certain consideration paid by the latter to the former. The Appellant's claim that there was no client for the Appellant to provide service was discarded.