2008 (5) TMI 26 - AT - Service Tax

Assessee engaged in sales and services of two wheelers assessee provided space to financial institutions who advanced loan to buyers of two wheelers - mere fact of financial institutions being provided with space by the appellant and the appellant receiving some money for that lease of table space cannot be brought within the definition of Business Auxiliary Services since assessee is not promoting business of financial institutions, he can t be brought under business auxiliary service

Summary

Issues:
1. Classification of activities as "Business Auxiliary Services" for service tax purposes.

Analysis:
The judgment revolves around the classification of activities for service tax purposes, specifically whether the activities undertaken by the assessee fall within the category of "Business Auxiliary Services." The Revenue contended that the assessee's activities, involving sales, services of two-wheelers, and arranging loans from financial institutions, should be classified as such services. However, the Commissioner (Appeals) disagreed, stating that the remuneration received was not for rent or business support services but for providing office space and furniture to banks/financial institutions to sell their products, categorizing it as 'Business Support Service' taxable only from 2006. The Revenue challenged this decision.

The learned Counsel for the appellant argued that the remuneration received was in the form of commission, not rent, referencing a similar case where the issue was decided in favor of the assessee. The Counsel relied on a Supreme Court judgment to support their argument. The learned DR, on the other hand, tried to distinguish the case laws cited by the Counsel.

The Tribunal, after considering the submissions, referred to a previous case where a similar issue was examined and concluded that the activity did not fall within the ambit of "Business Auxiliary Services." The Tribunal reiterated the findings of the previous case, emphasizing that providing table space on lease to financial institutions did not constitute such services. The Tribunal highlighted that the financial institutions paid remuneration for occupying space at the appellant's premises and that the appellant did not promote the financial institution's business. Therefore, the Tribunal dismissed the Revenue's appeal, aligning with the precedent set in the previous case.

In conclusion, the Tribunal upheld the Commissioner (Appeals) decision, ruling that the activities of the assessee did not qualify as "Business Auxiliary Services" for service tax purposes. The judgment provides a detailed analysis of the nature of the activities, the remuneration received, and the absence of evidence supporting the Revenue's classification, ultimately leading to the dismissal of the Revenue's appeal.