2018 (5) TMI 1525 - AT - Service Tax

Business Auxiliary Services - appellant provided table space to various financial institutions, in their premises for processing/preparation of loan documents and received commission/charges for providing such table space from the financial companies - Held that - The issue of leviability of Service Tax on such commission/charges for providing table space is no more res-Integra being settled by the Larger Bench of this Tribunal, in the case of Pagariya Auto Center s case 2014 (2) TMI 98 - CESTAT NEW DELHI (LB) , where it was held that Where mere space is provided along with furniture for facilitating accommodation of representatives of financial institutions in the premises of an automobile dealer and consideration is received for that singular activity, such consideration may perhaps constitute a rent for the provision of space and associated amenities. Such restricted relationship/transaction may not amount to BAS. There is no contrary evidence produced by the Revenue to show that the appellant had acted as Direct Selling Agent (DSA) for the banks, instead of providing table space to the executive of the respective banks - appeal allowed - decided in favor of appellant.

Summary

Issues:
Leviability of Service Tax on commission/charges for providing table space in premises.

Analysis:
The appeal was filed against an order passed by the Commissioner (Appeals) Central Excise-Rajkot, confirming the demand for Service Tax on commission/charges received for providing table space to financial institutions. The appellant, registered as an 'Authorized Service Station,' allowed financial institutions to use their premises for processing loan documents and received commission for the same. The appellant argued they were not acting as a Direct Selling Agent (DSA) and thus, the commission received should not be taxable under Business Auxiliary Service (BAS). The appellant relied on a precedent set by the Larger Bench of the Tribunal in the case of Pagariya Auto Center. The Revenue, however, supported the findings of the Commissioner (Appeals).

Upon examination, it was found that the appellants indeed provided table space to bank executives for processing loan documents, receiving commission/charges in return. The Tribunal referred to the Larger Bench's decision in the Pagariya Auto Center case, which established that merely providing table space does not necessarily constitute BAS. The Tribunal highlighted that if the transaction involves only providing space and associated amenities for a singular activity, it may be considered as rent for space rather than BAS. In the absence of evidence proving the appellant acted as a Direct Selling Agent for the banks, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief if applicable.

In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the importance of evidence and the specific nature of the transactions in determining the leviability of Service Tax on commission/charges for providing table space. The decision was based on the interpretation of the law and precedent set by the Larger Bench, ensuring a fair and just outcome in line with established legal principles.