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2024 (4) TMI 432 - AT - Service TaxLevy of Service tax - Business Auxiliary Service - incentives being received by the appellant amounts to receipt of payment for providing the taxable service in relation to promotion or marketing or sale of goods, produced or provided by MUL - Charges received by the appellant for extended warranty - Extended period of Limitation - penalty - HELD THAT:- The appellant in no way, is promoting or marketing the services provided by the client i.e. MUL. It is also found that the appellant has received the commission from MUL and not from the bank, as alleged by the Department. It is also found that MUL vide its mail dated 17.05.2004 has already clarified that the dealers are not required to pay service tax on the commission received by them from MUL because MUL has deposited the applicable service tax - the demand of service tax under the category of ‘Business Auxiliary Service’ is not sustainable in law and therefore, the same is set aside. Charges received by the appellant for extended warranty - HELD THAT:- It is a settled law that the service tax is not liable to be paid under ‘Business Auxiliary Service’ for warranty commission. Extended period of Limitation - HELD THAT:- No case has been made by the Department to show any positive act with intent to evade payment of duty. It has been held in the case of Sunshine Steel Industries [2023 (1) TMI 638 - CESTAT NEW DELHI] which is upheld by the Hon’ble Supreme Court in [2023 (7) TMI 479 - SC ORDER] holding that the extended period cannot be invoked for a demand raised on the basis of audit. Therefore, we find that extended period cannot be invoked and in the present case, the substantial demand is beyond the period of limitation. Penalty - HELD THAT:- The issue does not arise when the demand itself is not sustainable. The impugned orders are not sustainable in law and therefore, set aside - appeal allowed.
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