CESTAT | Tribunal discusses distinction between mere provision of ‘table space’ and actual rendering of service; Non discharge of tax liability as provider of “business auxiliary service” partly allowed



Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of CJ Mathew (Technical Member) and Ajay Sharma (Judicial Member) partly allowed an appeal which was filed with the issue of non-discharge of tax liability of Rs.17,46,066/-, as provider of ‘business auxiliary service’, for the period between April 2007 and January 2012 which was confirmed by the original authority as payable under proviso to Section 73(1) of Finance Act, 1994, along with interest thereon under section 75 of Finance Act, 1994, besides imposing penalties under Section 76, 77 and 78 of Finance Act, 1994.

The appellant was an authorized dealer and service centre for motor vehicles, had provided space for insurance companies to solicit customers of insurance contracts on the vehicles sold by them.

The Tribunal observed that all the decisions relied on by the Authorised Representative were relied upon the decision of the Larger Bench of this Tribunal in Pagariaya Auto Centre v. Commissioner of Central Excise, Aurangabad, 2014 (33) STR 505 (Tri.Del.) which was infact relied on by the appellant to contend the distinction between mere provision of ‘table space’ and actual rendering of service.

The Tribunal was of the view that this decision followed in the several decisions of the Tribunal, has clearly determined, in general, the taxability of receipts from insurance companies operating at the premises of motor vehicle dealers. The exclusion enunciated in the decision of the Larger Bench is the latitude afforded should an assessee be able to establish that only ‘table space’ was provided.

The Tribunal found that the appellant had discharged tax liability of Rs. 17,46,066/- and interest of Rs. 6,39,918/- on 14th March 2012 which precedes issue of show cause notice. In the light of section 73(4) of Finance Act, 1994, which is the sole ground for denying recourse to Section 73(3) of Finance Act, 1994, it is clear that the appellant herein has discharged tax liability in the manner contemplated by Section 73(3) of Finance Act, 1994, upon intimation by the jurisdictional central excise officers.

The Tribunal partly allowed the appeal to the limited extent of setting aside the penalties imposed by the original authority and upheld in the impugned order.[Kankariya Automobiles (P) Ltd v. Commr. of CE & Customs, Service Tax Appeal No: 86366 of 2015 decided on 05-08-2021]


Suchita Shukla, Editorial Assistant has reported this brief.


Advocates before the Tribunal:

For the appellant: None

For the respondent: Shri Onil Shivadikar