Per : Ashok Jindal
The appellant has filed this appeal against the confirmation of service tax under the category of ‘Business Auxiliary Services’ of Rs.9,68,805/- along with interest and penalties under Section 76, 77 and 78 of the Finance Act, 1994.
2. The facts are that the appellant is a dealer of automobiles for Hero Honda and Tata Motors. They were having tie up with various banks like ICICI, HDFC, Bajaj Finance or other financial institutions through whom they help to arrange finance for their customers. For that, they receive some commission from these banks. The allegation against the appellant is that the activity taken over by the appellant by helping in financial assistance to the buyers through financial institution is classifiable under Business Auxiliary Services as defined under Section 65 (19) of Chapter V of the Finance Act, 1994.
3. A show-cause notice was issued demanding service tax, interest and proposing penalties under Section 76, 77 and 78 of the Finance Act, 1994. The show-cause notice adjudicated and the demand was confirmed along with interest and various penalties also imposed. Aggrieved by the same the appellant is before me.
4. Heard both sides.
5. The learned Counsel appearing on behalf of the appellant submitted that they are not indulges in promoting and marketing the business of the bank but they have simply helped these finance institutions by providing table space to provide finance assistance to their customers for which they were getting some money. In fact the appellant has provided the table space to these financial institutions to launch of their prospective buyers of their vehicles. Against that providing of space the appellant receives some amount as cash. Hence, the demands are not sustainable under the category of Business Auxiliary Services. To support his contention the appellant relied on in the case of Silicon Honda vs. CCE, Bangalore - 2007 (7) STR 475 (Tri. - Bang.).
6. On the other hand learned DR submitted that at the time of investigation the
appellant admitted their liability and paid service tax and the contention that they provided the facility of table space to the financial institutions is an after thought. There is no written agreement between the appellant and the financial institutions with regard to the lease of table space to them. More over he relied on the Board’s Circular No. 87/05/2006-ST dated 6.11.06 and submitted that the activity taken over by the appellant is squarely covered under Business Auxiliary Services and the lower appellate authority has rightly confirmed the demand and the appeal is liable to be rejected.
7. On careful examination of the submissions made by both the sides, I find that the facts in the impugned case are identical to the facts of Silicon Honda (supra) which the learned DR fairly agreed. In Silican Honda case the Tribunal has observed as under:-
‘Nowhere in the impugned order the Commissioner (A) has not referred to any evidence of financial institutions giving commission to the appellants for providing loan to their customers, who are brought through the appellants. The appellants have denied having promoted the business of financial institutions. They have stated that they are paid by the financial institutions for occupying the table space at the appellants’ premises. This portion of the evidence is not contradicted. Therefore, 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 Service’. There is no merit in the impugned order and the same is set aside by allowing the appeal.’
7.1 In this case also the appellant had provided table space to the financial institutions for which they were getting some money from them. Hence, the issue involved in this case is squarely covered by the decision of Silicon Honda (supra) wherein it was held that the activity for providing the table space to the financial institutions cannot be brought within the definition of ‘Business Auxiliary Service’. Hence, in this case also, the activity taken over by the appellant is not a ‘Business Auxiliary Service’. Hence the demands are not sustainable. Accordingly, the impugned order is set aside and the appeal is allowed with consequential relief, if any.