2018 (5) TMI 116 - AT - Service Tax

Business Auxiliary Service - primary business of the appellant is selling motor bikes/scooters and they are authorized dealer of Bajaj brand - Held that - the identical issue has been decided by this Tribunal in the case of Rennaissance Leasing & Finance Pvt. Ltd. Vs. Commissioner of Central Excise, Jaipur 2017 (3) TMI 559 - CESTAT NEW DELHI , where it was held that the said activities are covered under the tax entry of Business Auxiliary Service in terms of Section 65(105)(zzb) of Finance Act, 1994 inasmuch as they are promoting and marketing the services provided by the client banks - demand upheld - appeal dismissed - decided against appellant.

Summary

Issues:
Confirmation of demand of Service Tax and imposition of penalty for providing taxable service under the category of 'Business Auxiliary Service' to financial companies by M/s Cama Motors Pvt. Ltd.

Analysis:
The appeal filed by M/s Cama Motors Pvt. Ltd. against the confirmation of demand of Service Tax and penalty imposition was addressed by the Appellate Tribunal CESTAT AHMEDABAD. Despite no representation from the appellant, the learned Authorized Representative for the Revenue highlighted that the appellants were involved in providing taxable services categorized under 'Business Auxiliary Service' to financial companies. The Revenue AR pointed out previous Tribunal decisions in similar cases, emphasizing the nature of the appellant's activities. The Tribunal reviewed the records and submissions, noting that the issue had been previously decided in cases like Rennaissance Leasing & Finance Pvt. Ltd. and Jaybharat Automobiles Ltd. The Tribunal referred to the observations made in the Rennaissance Leasing case, emphasizing that the appellant's activities of promoting loans for vehicles and facilitating loan disbursement fell under 'Business Auxiliary Service.' The Tribunal cited the necessity of identifying the nature of the transaction to determine tax liability under this category. It was concluded that the appellant's promotional services for financial loans disbursed by banks constituted a substantial business promotion activity, justifying the classification under 'Business Auxiliary Service.' The Tribunal dismissed the appeal, stating that the penalties could not be contested based on a bona fide belief without substantial grounds or evidence. As the appellant failed to provide such evidence, the impugned order was upheld, and the appeal was dismissed.

This judgment underscores the importance of accurately determining the nature of transactions to establish tax liability under specific service categories. It also highlights the significance of providing substantial grounds and evidence to contest penalties based on a bona fide belief. The decision draws on previous Tribunal rulings to support the classification of activities under 'Business Auxiliary Service,' emphasizing the promotion and marketing aspects in such cases.