Service tax on dealer-provided free services fails where no consideration from manufacturer or customer is proven.

Service tax on dealer-provided free own services was held unsustainable where the department failed to establish receipt of consideration from either the manufacturer or the vehicle buyer. The dispute turned on whether those free services fell within a taxable service category, but the absence of proved consideration was decisive. A revenue circular did not change the result on the facts found. The stated legal position is that, without evidence of consideration for the services, service tax liability cannot be upheld on such dealer-provided free services.

---

---

Issues: Whether service tax was payable on free own services provided by dealers when no consideration was shown to have been received from the manufacturer or the customers.

Analysis: The dispute turned on whether the services rendered by the dealers fell within the taxable service category and whether any consideration had actually been received for those free services. The record did not establish that the dealers received consideration from the manufacturer or from the vehicle buyers for the free services. In the absence of such consideration, and in view of the settled view applied in similar matters, the demand could not be sustained. The circular relied upon by Revenue did not alter the position on the facts found.

Conclusion: The respondent was not liable to pay service tax on the free own services, and the Revenue's challenge failed.

Ratio Decidendi: Service tax on dealer-provided free services is not sustainable where the department fails to show receipt of consideration for those services from the manufacturer or the customer.

---