2015 (9) TMI 531 - AT - Service Tax

Business auxiliary service or Business support service - automobile dealers - appellant was providing space and accommodation to the financial institutions - Held that - Appellant was receiving incentive/commission from bank and other financial institutions of providing services to them in relation to granting loans to its customers and that it was not charging any rental from them (i.e. banks/financial institutions). In the light of the said statement, we find that the inference by Commissioner (Appeals) that the amount received by the respondent was for providing accommodation and space is not supported by any evidence with regard thereto. That such commission/incentive is liable to service tax under business auxiliary service has been held by various judicial pronouncements including in the cases of M/s Roshan Motors Ltd. Vs. CCE, Meerut 2008 (11) TMI 55 - CESTAT, NEW DELHI , Pagariya Auto Center Vs. CCE, Aurangabad 2014 (2) TMI 98 - CESTAT NEW DELHI (LB) and TVS Motor Co. Ltd. Vs. CCE, Chennai-III 2012 (7) TMI 227 - CESTAT, CHENNAI - Impugned order is set aside - Decided in favour of Revenue.

Summary

Issues:
1. Appeal against service tax demands under business auxiliary service.
2. Interpretation of service provided by the respondent to financial institutions.
3. Reliance on statement of authorized representative for determining nature of services.
4. Absence of respondent during proceedings.

Analysis:
1. The appeal was filed by the Revenue against the order-in-appeal confirming service tax demands. The primary adjudicating authority had upheld the demand under business auxiliary service, while the Commissioner (Appeals) set aside the orders-in-original, stating that the service rendered was business support service taxable only from a specific date.

2. The Revenue contended that the commission/incentive received by the respondent from financial institutions was for services related to granting loans, not for providing space/accommodation. A statement by an authorized representative, Shri Brij Mohan, supported this claim, emphasizing that the respondent did not charge rent from the institutions. The Tribunal noted that previous judicial decisions also supported taxing such commissions/incentives under business auxiliary service.

3. Despite the absence of the respondent during the proceedings and no request for adjournment, the Tribunal considered the Revenue's contentions and the evidence on record. The reliance on the statement of Shri Brij Mohan, authorized by the appellant, played a crucial role in determining the nature of services provided and the tax liability associated with them.

4. Given the clear statement by Shri Brij Mohan and the absence of contrary evidence, the Tribunal found that the commission/incentive received was for services related to granting loans, not for providing accommodation or space. Relying on established judicial precedents, the Tribunal allowed the appeal and set aside the orders-in-appeal, thereby overturning the earlier decision confirming the service tax demands.