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Auto Links Enterprises (I) Pvt. Ltd V/S CCE, Delhi-I

    S.T. Appeal No. 52858 of 2014 (Arising out of Order-in-Appeal No. 19/ST/DLH/2014 dated 13.02.2014 passed by the Commissioner of Central Excise (Appeals), Delhi-I) and Final Order No. 51737/2018
    Decided On, 07 May 2018
    At, Customs Excise Service Tax Appellate Tribunal New Delhi
    By, THE HONORABLE JUSTICE: V. PADMANABHAN
    By, MEMBER AND THE HONORABLE JUSTICE: AJAY SHARMA
    By, MEMBER
    For Petitioner: A.K. Batra and Vibha Narang, C.A And For Respondents: G.R. Singh, AR


Judgment Text

1. The present appeal is against the Order-in-Appeal No. 19/ST/DLH/2014 dated 13.02.2014.

2. The appellant is an authorised dealer of M/s. Tata Motors Limited and is engaged in the selling of passenger cars manufactured by M/s. Tata Motors. The dispute, which covers the period 01.07.2003 to 31.12.2004, is that the appellant, in the course of their business as a authorised dealer of M/s. Tata Motors, has facilitated various banks and Non Banking Financial Institutions, in the activity of sanctioning bank loans to the customers who would like to purchase vehicle of M/s. Tata Motors. Both the authorities below have taken the view that the commission received by the appellant from the banks/NBFC, will be liable to payment of service tax under the category of 'Business Auxiliary Service' (BAS) falling under Section 65(19) of the Finance Act, 1994. Service Tax amounting to Rs. 15,71,614/- has been demanded from the appellant alongwith interest and penalty under various Sections of the Finance Act, 1994. The impugned order has been challenged before us.

3. With this background, we heard Sh. A.K. Batra, ld. Consultant for the appellant and Sh. G.R. Singh, ld. AR for the Revenue.

4. Ld. Consultant submitted that the appellant has not acted as an agent for Banks/NBFCs but has provided only table space in their premises so that the banks/NBFCs can conduct their business of financing vehicles sold by the appellant. He relied on the decision of the Larger Bench of the Tribunal in the case of M/s. Pagariya Auto Center v. CCE, Aurangabad : 2014 (2) TMI 98-CESTAT, New Delhi (LB) in which the Larger Bench has laid down certain guidelines to decide whether the activity will be covered under BAS or 'Renting of Immovable Property Service'. He further submitted that the Tribunal has been consistently following the said decision of the Larger Bench in subsequent cases.

5. Ld. AR justified the impugned order. He referred to the initial paragraph of the show cause notice and argued that the appellant has not simply provided table space but have actively promoted the loans of various Banks and NBFCs. He accordingly submitted that the demand for service tax may be upheld.

6. We have heard both sides and perused the record. We have also considered the case law relied upon by the ld. Consultant.

7. The activity of the appellant has to be examined in the light of the contracts executed by the appellant with various Banks/NBFCs to decide if the commission received by the appellant will be liable to payment of service tax under BAS. It is required to be examined whether the activities are clearly covered within the definition of BAS.

8. The larger Bench of the Tribunal in the case of Pagariya Auto Center (supra) has observed that-

"20. On a consideration of the apparent conflict of opinion in the decisions mentioned in the order of reference and the other decisions which were cited at bar, it is clear that no uniform principle emerges as would guide determination of whether a particular transaction involving an interface between an automobile dealer and bank or financial institution would per se amount to BAS. The identification of the transaction and its appropriate classification as the taxable BAS or otherwise must clearly depend upon a careful analysis of the relevant transactional documents. Only such scrutiny and analysis would ensure rational classification of the transaction.

21. 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. If on the other hand, the transactional documents and other evidence on record indicates a substantial activity falling within the contours of any of the integers of the definition of BAS, spelt out in Section 65(19), then it would be legitimate to conclude that BAS is provided."

9. We are of the view that the liability to BAS will need to be carefully re-examined in the light of the

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Larger Bench decision of the Tribunal and the nature of activities rendered by the appellant will need to be examined by considering the various contracts examined by the appellant with Banks and NBFCs. In view of the above, the impugned order is set aside and matter remanded to the original authority. The appellants will be at liberty to put forth their case before passing order in the denovo proceedings. 10. In the result, the appeal is allowed by way of remand.
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