2015 (8) TMI 155 - AT - Service Tax

Waiver of pre deposit - business auxiliary service - given space for furniture for the representatives of banks/insurance companies - Receipt of commission from the insurance/banking companies - Held that - In the case of Pagariya Auto Centre (2014 (2) TMI 98 - CESTAT NEW DELHI (LB)), the CESTAT held that with regard to providing table space to financial institutions, the classification of transaction under BAS or otherwise must depend upon analysis of relevant transactional documents and where mere space is provided along with furniture for facilitation accommodation of representatives of financial institutions in premises of automobile dealers and consideration is received for that singular activity, it may perhaps constitute a rent and not amount to be business auxiliary service but if the transactional documents and other evidence on record indicated substantial activity falling within Section 65(19) of Finance Act, 1994, then it would legitimately classifiable under business auxiliary service. The issue involves proper analysis of the nature of transactions - Partial stay granted.

Summary

Issues:
1. Classification of service as business auxiliary service or rent for immovable property.
2. Time-barred demand.
3. Wilful mis-statement or suppression of facts.

Analysis:
1. The appellant argued that the amount received was in the nature of rent for immovable property as it provided space for furniture to representatives of banks/insurance companies. Citing the judgment of Pagariya Auto Center, the appellant contended that the service was not taxable under business auxiliary service. However, the respondent claimed that the appellant was receiving commission for promoting the business of the banks/insurance companies, which financed/insured the vehicles. The Tribunal noted that the classification of the transaction must depend on an analysis of relevant documents. If the evidence indicated substantial activity falling within the definition of business auxiliary service, it would be classified as such. The Tribunal emphasized the need for a precise determination of the nature of transactions to establish whether they fell within the scope of business auxiliary service.

2. Regarding the time-barred demand, the appellant argued that there was no wilful mis-statement or suppression of facts. The respondent contended that the appellant had not disclosed the relevant facts, making the extended period applicable. The Tribunal considered both arguments and emphasized the importance of analyzing the evidence to determine whether there was indeed any mis-statement or suppression of facts.

3. After considering the contentions of both parties, the Tribunal ordered the appellant to make a pre-deposit of 50% of the adjudicated service tax liability with proportionate interest within four weeks, as required by the relevant provisions of the Central Excise Act and the Finance Act. The Tribunal stayed the recovery of the remaining liability during the appeal process, subject to compliance with the pre-deposit requirement. However, failure to comply would result in the dismissal of the appeal. The appellant was instructed to report compliance by a specified date, and non-compliance would lead to adverse consequences.