CITY HONDA Vs. COMMISSIONER OF SERVICE TAX, BANGALORE

JUDGEMENT

(1.) APPEAL No. 94/2005. This appeal is filed against the Order -in -Appeal No. 181/2005 -Central Excise dated 28 -9 -2005 challenging payment of service tax in respect of commission received from various financial institutions. The appellant is a dealer of selling of cars and two wheelers. In order to promote the business, the place in the show room was provided for banking and non -banking financial institutions and companies and these financial institutions were providing finance to the customers. The appellant was only completing formalities of contract. They received only commission for permitting the business of the above financial institutions. They have admitted the liability and paid the service tax on receipt of the show cause notice. However, the appellants pleaded that they were not rendering any service to the financial institutions and hence the commission received by them does not attract service tax. The Original authority and the appellate authority did not go into the question of leviability of service tax on the activity of the appellants. However the Commissioner (Appeals) has taken a view that as the appellants did not challenge the case on merits, he is not entering to the question to render his findings. In a brief order, the Commissioner (Appeals) has dismissed the appeal.

(2.) THE learned Sr. Counsel submits that the appellants had paid service tax to avoid penal provisions. They are challenging the levy of service tax as their activity does not come within the category of 'Business Auxiliary Service'. He submits that the question of leviability of service tax on the activity of the appellants ought to have been considered by the authorities below. As this question has not been answered, he prayed for remanding the matter so that they can satisfy the Original authority that service tax is not leviable on the activity of the appellants. The learned Sr. Counsel submits that he can also produce certain judgments on this point before the Original authority.

(3.) THE learned JDR submits that the matters pertaining to similar issue had come up only for hearing the stay applications. He submits that the appellants have clearly admitted their liability and paid the amount also. He submits that the activity of the appellants clearly comes within the category of "Business Auxiliary Service" and the appellants do not have any case on merits. He relies on the Tribunal ruling rendered in the case of Vikas Spinners v. Commissioner of Customs, Lucknow [2001 (128) E.L.T. 143 (Tri. - Del.)] wherein the loaded value has been accepted and duty paid in terms of Section 14 of the Customs Act, 1962. Therefore, the Tribunal took a view that the importer is estopped from challenging the same subsequently.