Appeal allowed: Providing space to finance companies not Business Auxiliary Service; no service tax liability.

The Tribunal allowed the appeal filed by the Appellant, ruling that providing space to finance companies without engaging in promotional or marketing activities does not constitute Business Auxiliary Service (BAS) and is not subject to service tax. The demands for service tax, interest, and penalty were set aside, concluding that the Appellant was not liable for service tax under BAS. The Department's appeal against the non-imposition of penalty under Section 76 of the Finance Act, 1994 was rejected.

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Issues Involved:
- Taxability of promotional or marketing activities provided by the appellant for finance companies under the category of Business Auxiliary Service (BAS).
- Imposition of penalty under Section 76 of the Finance Act, 1994.

Summary:
The Appellant, engaged in the sale of vehicles as dealers, received a Show Cause Notice alleging that they rendered promotional activities for finance companies, considered as a taxable service under the category of 'Commission Agent' and liable to service tax under BAS. The demand for service tax, interest, and penalty was confirmed in the original order. The Department appealed against the non-imposition of penalty under Section 76 of the Finance Act, 1994.

The Appellant contended that they did not act as commission agents for financial institutions/banks and merely provided space, which should not be considered as rendering BAS. They argued that they did not promote or market the services of financial institutions/banks and cited relevant circulars and legal precedents to support their position.

The Tribunal observed that the Appellant only provided space to finance companies without undertaking promotional or marketing activities for them. The Larger bench decision in a similar case supported the view that providing space to finance institutions does not fall under BAS. The Tribunal applied the principles laid down in previous decisions to conclude that the Appellant was not liable to pay service tax under BAS. Consequently, the demands in the impugned order, including interest and penalty, were set aside.

In conclusion, the Tribunal allowed the appeal filed by the Appellant and rejected the appeal filed by the Department, emphasizing that the Appellant was not liable for service tax under BAS.

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