2015 (8) TMI 1006 - AT - Service Tax

Business Auxiliary Services - Space provided to banks - Held that - Facts regarding nature of services rendered by the appellant to the banks is not clear. No statement/contract entered between the appellant and the banks has been brought on record by the Department regarding the exact nature of services provided. - mere providing of table space will not give valuable inputs to identify as to what taxable service is rendered. There is no evidence on record in the present proceedings that commissions paid to the appellant are with respect of facilitating loans to the prospective customers on behalf of the banks. The ratio laid down by the Larger Bench in the case of Pagariya Auto Center vs. CCE, Aurangabad (2014 (2) TMI 98 - CESTAT NEW DELHI (LB)) is squarely applicable to the facts of this case. - Decided in favour of assessee.

Summary

Issues:
1. Whether the appellant is providing Business Auxiliary Services to banks.
2. Whether the commissions received by the appellant are chargeable to service tax.
3. Interpretation of the nature of services provided by the appellant to the banks.
4. Application of the legal principles established in the case law of Pagariya Auto Center vs. CCE, Aurangabad.

Analysis:

Issue 1:
The main contention in this case was whether the appellant was providing Business Auxiliary Services to ICICI Bank and HDFC Bank. The Revenue argued that the appellant was indeed providing such services, while the appellant claimed they were only providing space in their premises to the banks. The Revenue alleged that the appellant received commissions from the banks for facilitating loans to customers, which fell under Business Auxiliary Services. However, the appellant argued that they were not arranging loans on behalf of the banks but merely allowing bank officials to interact with customers in their showrooms.

Issue 2:
The focus then shifted to whether the commissions received by the appellant were liable to service tax. The appellant contended that the amounts received were not taxable under Business Auxiliary Services as they were not directly involved in arranging loans. The case law of Pagariya Auto Center vs. CCE, Aurangabad was cited by the appellant to support their argument that merely providing table space did not necessarily constitute a taxable service.

Issue 3:
The Tribunal observed that the exact nature of services provided by the appellant to the banks was not clearly documented in the case records. No definitive statement or contract between the appellant and the banks regarding the services offered was presented. The Tribunal emphasized that the commissions paid to the appellant were not proven to be related to facilitating loans for the banks. The judgment in Pagariya Auto Center vs. CCE, Aurangabad was referenced to highlight that providing table space alone did not automatically classify as Business Auxiliary Services.

Issue 4:
In analyzing the case, the Tribunal referred to the decision of the CESTAT Larger Bench in Pagariya Auto Center vs. CCE, Aurangabad. The Tribunal noted that the principles established in this case were directly applicable to the present situation. It was concluded that there was insufficient evidence to support the claim that the appellant's activities constituted Business Auxiliary Services. Therefore, the appeal filed by the appellant was allowed, granting them consequential relief.

In summary, the judgment favored the appellant by accepting their argument that the services provided did not fall under Business Auxiliary Services, as the commissions received were not linked to facilitating loans for the banks. The Tribunal relied on legal precedents to support this decision and emphasized the importance of clear evidence to determine the taxability of services provided.