2008 (8) TMI 206 - AT - Service Tax

Appellants, automobile dealers allotted some space for financiers and as consideration they received certain amounts for giving space to the financiers demand raised treating them as provider of Business Auxiliary Services - appellants should produce enough evidence to convince the lower authority that whatever they had received is only rent and not any commission for increasing the business of the financiers case remanded to Original Authority for de novo consideration

Summary

Issues involved:
1. Classification of services as 'Business Auxiliary Services' or rent for space.
2. Imposition of penalty by the Commissioner (Appeals).
3. Remand of the matter to the Original Authority for de novo consideration.

Analysis:

Issue 1: Classification of services as 'Business Auxiliary Services' or rent for space
The appellants, automobile dealers, were alleged to be rendering 'Business Auxiliary Services' by providing space to financiers. The lower authority confirmed the demand of Service Tax, which was upheld by the Commissioner (Appeals) despite setting aside the penalty. The appellants argued that the amounts received were rent for the space and not consideration for promoting the financiers' business. The Tribunal noted discrepancies in the amounts received and directed the appellants to provide sufficient evidence to establish that the amounts were indeed rent. The matter was remanded to the Original Authority for reevaluation, emphasizing the need for documentary evidence to support the appellants' contentions.

Issue 2: Imposition of penalty by the Commissioner (Appeals)
The Commissioner (Appeals) set aside the penalty imposed by the lower authority but upheld the demand of Service Tax. The revenue appealed against the setting aside of the penalty, citing various case laws. However, as the Tribunal remanded the matter to the Original Authority for fresh consideration, the question of penalty imposition was left open for future determination.

Issue 3: Remand of the matter to the Original Authority for de novo consideration
The Tribunal, after careful consideration, found doubts regarding the nature of the amounts received by the appellants and instructed them to provide ample documentary evidence to clarify that the amounts constituted rent for space and not commission for promoting the financiers' business. The matter was remanded to the Original Authority for a fresh decision within four months, with a directive for a thorough examination of the Service Tax liability. The Tribunal allowed the appeals by way of remand, leaving the imposition of penalty to be determined in subsequent proceedings.

This detailed analysis of the judgment highlights the key issues addressed by the Appellate Tribunal CESTAT, Bangalore, regarding the classification of services, penalty imposition, and the remand of the matter for further evaluation.