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2023 (2) TMI 990 - AT - Service TaxLevy of service tax - payments received as incentive / discounts reimbursements which were in the nature of consideration for service (extended by MSIL to the appellant) - appellant argued that incentives are attributable to the activity of sale and not for rendering any services by the appellant and therefore are not chargeable to service tax - time limitation. HELD THAT:- The issue is no longer res integra and as referred to by the Learned Counsel for the appellant the same has been considered and decided in favour of the assessee in the various cases - reliance can be placed in the case of M/S. T.V. SUNDRAM IYENGAR & SONS PVT. LTD. VERSUS THE COMMISSIONER OF CGST & CENTRAL EXCISE, MADURAI [2021 (5) TMI 159 - MADRAS HIGH COURT] where it was held that where the sale transaction is on principal to principal basis, merely because a discount was passed by the manufacturer to the assessee, that may not be construed as commission and therefore, it cannot be the subject matter of levy of service tax. The Larger Bench of this Tribunal in the case of KAFILA HOSPITALITY & TRAVELS PVT. LTD. VERSUS COMMISSIONER, SERVICE TAX, DELHI [2021 (3) TMI 773 - CESTAT NEW DELHI] dealt with the issue whether service tax can be levied under the category of 'Business Auxiliary Service' on target based incentives paid to the travel agents by the Airlines as they were promoting and marketing the business of the Airlines. The Tribunal took the view that it is not a case where the air travel agent is promoting the service of the Airlines rather by sale of airlines ticket he was ensuring the promotion of its own business even though this may lead to incidental promotion of the business of the Airlines. Thus, the activity undertaken by the appellant is for the sale and purchase of the vehicle and the incentives are in the nature of trade discounts. The incentives, therefore form part of the sale price of the vehicles and have no correlation with the services to be rendered by the appellant. That in terms of the dealership agreement, the appellant purchases the vehicles from MSIL and sells the same to its end customers. The activity of promoting the sale is with respect to the vehicles owned by the appellant which incidentally is in interest of both the parties - the appellant is engaged in the onward sale of vehicles which involves merely transfer of property in goods which is excluded from the definition of 'service'. That section 66D of the Finance Act, 1994 contains the negative list of services under various clauses and clause (e) provides for 'trading of goods'. On this ground also, it is found that incentives which are part of sale activity are not exigible to service tax. Thus, the amount of incentives and discounts cannot be treated as consideration for any service and therefore no Service Tax is leviable thereon. Having decided the issue on merits in favour of the assessee, it is no longer required to go into the question of limitation raised by the appellant. Appeal allowed.
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