Cce, Kanpur vs M/S Society Motors

(Arising out of Order-in-Appeal No. 544-545/ST/APPL/KNP/2010 dated 21.10.2010 passed by the Commissioner, Central Excise & Service Tax, Kanpur)

For Approval & Signature :

Honble Mr. R.K. Singh, Member (Technical)

Honble Ms. Sulekha Beevi, C.S., Member (Judicial)

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether their Lordships wish to see the fair copy of the order?

4. Whether order is to be circulated to the Department Authorities?

CCE, Kanpur Appellant

Vs.

M/s Society Motors Respondent

Appearance:

Shri M.R. Sharma, D.R. - for the Appellant

Shri Amresh Jain, D.R.

None - for the Respondent

Coram :Honble Mr. R.K. Singh, Member (Technical)

Honble Ms. Sulekha Beevi, C.S., Member (Judicial)

F. Order No.52342-52343/2015

Per R.K. Singh :

Revenue has filed these appeals against the order-in-appeal dated 21.10.2010 in terms of which service tax demands of Rs.3,39,071/- and Rs.1,64,140/- confirmed along with interest and penalty by the primary adjudicating authority were set aside. The primary adjudicating authority had confirmed the demand under business auxiliary service [Section 65(19) of the Finance Act, 1994] on the ground that the respondent provided service in relation to grant of loans by the financial institutions for which it was getting commission/incentives. The Commissioner (Appeals) set aside the orders-in-original on the ground that the appellant was only providing space and accommodation to the financial institutions and therefore service rendered was business support service which was taxable only from 1.5.2006.

2. The Revenue has contended that incentive/commission paid by financial institutions was for providing services in relation to granting of loans and that the amount received was not on account of rent for providing space/accommodation to the financial institutions. Revenue drew our attention to the statement of Shri Brij Mohan recorded on 11.2.2005. Shri Brij Mohan was authorised by the appellant to give the statement and his statement is a relied upon documents (No. 5).

3. None appeared for the respondent nor any request for adjournment is received. It is seen that even earlier on 23.1.2015 nobody appeared on behalf of the respondent.

4. We have considered Revenues contentions and perused the records. In his statement, Shri Brij Mohan clearly stated that the appellant was receiving incentive/commission from bank and other financial institutions of providing services to them in relation to granting loans to its customers and that it was not charging any rental from them (i.e. banks/financial institutions). In the light of the said statement, we find that the inference by Commissioner (Appeals) that the amount received by the respondent was for providing accommodation and space is not supported by any evidence with regard thereto. That such commission/incentive is liable to service tax under business auxiliary service has been held by various judicial pronouncements including in the cases of M/s Roshan Motors Ltd. Vs. CCE, Meerut  2009-TIOL-76-CESTAT-DE., Pagariya Auto Center Vs. CCE, Aurangabad  2014 (33) STR 506 (Tri.-LB) and TVS Motor Co. Ltd. Vs. CCE, Chennai-III  2012 (28) STR 127 (Tri.-Chennai)

5. In the light of the foregoing we allow the appeal and set aside the impugned orders in appeal.

(R.K. Singh)

Member (Technical)

(Sulekha Beevi C.S.)

Member (Judicial)

RM

3