2026-VIL-769-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Rendering recovery services to NBFC/Bank – Appellant neither declared these services nor paid any service tax on the consideration received - Whether the arrangement between the appellant and Barclays was a joint venture, thereby exempting the appellant from payment of service tax on the consideration received for the recovery services, or whether it was a case of the appellant providing taxable recovery services to Barclays - HELD – The appellant's contention that the arrangement between it and Barclays was a joint venture is rejected. For something to be a joint venture, there must be an agreement or arrangement between the parties to run a business or venture sharing their costs, efforts and returns. However, in the present case, Barclays had merely engaged the appellant as a recovery agent to recover the amounts due to it from the borrowers, and the appellant received a commission for the same. This was clearly a case of the appellant providing taxable recovery services to Barclays, and the appellant was liable to pay service tax on the consideration received - The extended period of limitation had been rightly invoked by the authorities, as the appellant had not declared the consideration received for the recovery services and had not paid the applicable service tax. The imposition of penalty on the appellant under Section 78 of the Finance Act, 1994 is also upheld – The impugned order confirming the service tax demand, interest, and penalty is upheld and the appeal is dismissed
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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