A-ONE CREDITS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant is engaged in the business of arranging finance and loans from the HDFC Bank, Yamuna Nagar to customers as direct selling agent w.e.f. July, 2003.

(2.) The appellant was not paying Service Tax on the consideration received by them from the said bank during the period 1 -7 -2003 to 10 -9 -2004. The Revenue issued a show cause notice on 8 -6 -2005. The appellant paid the Service Tax along with interest on 5 -7 -2005, 7 -11 -2005 and 29 -5 -2006. On adjudication, tax demanded was confirmed along with interest and penalties. The tax and interest already paid was appropriated and the adjudicating authority waived penalty on the appellants by invoking powers under Section 80 of the Finance Act, 1994. Aggrieved by the order, Revenue filed an appeal before the Commissioner (Appeals) who imposed a penalty of Rs. 500/ - under Section 75A and Rs. 1,01,884/ - under Sections 76 and 78 of the Finance Act, 1994. Aggrieved by the order of Commissioner (Appeals), the appellants have filed this appeal. The contention of the appellant is that there was considerable confusion about the scope of the entry of "Business Auxiliary Service" during the initial stage when this entry for Service Tax was introduced in Finance Act, 1994 with effect from 10 -9 -2004. The appellant and the bank which was receiving the service were prima facie of the view that tax was not payable on the impugned services and that is the reason for delay in paying the Service Tax. Appellant pleads that the original authority had taken into account this position and waived penalty invoking the power under Section 80 of Finance Act, 1994. The Commissioner (Appeals) should not have imposed penalty reversing the decision of adjudicating authority. Learned AR for Revenue submits that even after the department advised the appellant in May 2005 to pay the Service Tax in question, they took considerable time in paying the Service Tax. The argument that the appellant was not aware of the tax is not acceptable. We have considered the arguments of both sides. We note that the appellant is not contesting the Service Tax amount and interest demanded. The appellant is a small service provider and the levy in question was in the initial stage of implementation. The very name of the service viz. "Business Auxiliary Service" does not give any clarity and the entry covered different types of activities. So there was confusion in the minds of people about the actual scope of such service. For that reason, the appellant was not able to claim the Service Tax amount from the HDFC Bank and consequently there was some delay in remitting the tax to the Government. In this type of situation, it is proper to invoke powers under Section 80 of Finance Act, 1994. The Adjudicating Authority rightly did so and there was no reason to reverse such order and impose penalty on the appellant. Therefore, we allow the appeal by setting aside the penalty imposed on the appellants by the impugned order. The appeal is allowed to that extent.