M/s. Liberty Sales vs CCE, Jaipur I

The appellants have filed this appeal against Order-in-Appeal No. 355(HKS)/ST/JPR-II/2007 dated 08/06/2007 in terms of which the Order-in-

Original No. 01/SK/JP-II/2006/J.C. dated 24/02/2006 was up held. The said Order-in-Original confirmed the demand of Rs.4,58,128/- along with

interest and penalties under Sections 76, 77 and 78 of the Finance Act, 1994, invoking the extended period on account wilful misstatement/suppression

of facts.

The facts, briefly stated, are that the appellants, a proprietary concern, were providing service as a sourcing agent of M/s. ICICI Home Finance

Ltd. for the promotion and marketing of the latter’s business in terms of a formal agreement signed between the two and were thus covered under

Business Auxiliary Service liable to service tax during the period 01.07.2003 to 30.11.2004 involved in the present case. The appellants neither took

the service tax registration nor paid the impugned service tax during the said period.

The appellants have contended that they were under a bonafide belief that they were not providing Business Auxiliary Service in-as-much as they

had only provided space to the ICICI HFL and also, being a proprietary concern they were not covered under the scope of commercial concern.

It is seen that the scope of the activity covered under the agreement entered into by the appellants with the ICICI HFL clearly stated that they

were appointed for “marketing of and sourcing customers, for ICICI HFL’s productsâ€. This does not leave any scope for any

ambiguity/confusion as regards its coverage under the Business Auxiliary Service which specifically includes such promotion and marketing in its

definition. Similarly they could not have been any confusion regarding the appellants being a commercial concern as they were clearly engaged in

commercial activity. In these circumstances, when there was no ambiguity or confusion, the contention of bonafide belief advanced by the appellants

is totally hollow and untenable. The appellants have not given any basis/ground for entertaining such belief. They have not shown as to how such a

belief on their part could arise. Merely uttering the words “bonafide belief†is not enough for its quasi judicial acceptance. The appellants have to

show the basis/grounds for entertaining such belief. As is evident, the appellants have not given even a semblance of any basis/ground based on which

such a “bonafide beliefâ€​ could arise on their part.

In the light of the foregoing, we find that the appellants have totally failed to show as to how the findings contained in the Order-in-Original and

affirmed in the impugned Order-in-Appeal suffer from any infirmity. In the facts and circumstances of this case, we also find no infirmity in the

impugned order. Consequently, the appeal is rejected.

[Dictated & Pronounced in the open Court].