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2015 (8) TMI 353 - CESTAT ALLAHABAD

2015 (8) TMI 353 - CESTAT ALLAHABAD - 2015 (40) S.T.R. 1018 (Tri. - Del.) - Taxability of incentives & reimbursements received from MUL - authorized dealer of Maruti Udyog Limited (MUL) - Business Auxiliary Service - Held that:- Appellant has mainly argued on the parameters that various incentives given by MUL, on which service tax demand is proposed to be raised under BAS, are of the nature of trade discounts based on performances or are simply certain reimbursements made by MUL for Sales/Joint .....

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04, 2004-2005 and demand under delayed payment of service tax for financial year 2003-2004; they have been able to reconcile certain payments made which clearly indicate that more service tax has been paid then what is demanded. We find that such a verification of claims made by the appellant can only be properly done by the Adjudicating Authority. - Matter remanded back - Decided in favour of assessee. - Service Tax Appeal No.479 of 2010 - ST/A/52197/2015-CU[DB] - Dated:- 8-7-2015 - Mr. G. Ragh .....

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sed under Section 76, 77 and 78 of the Finance Act, 1994. 2. Shri Amit Awasthi (Advocate), Shri Ankit Vishnoi (Advocate) and Ms. Yashasvini Chandra (Advocate) appeared on behalf of the appellant. Learned Advocate Shri Amit Awasthi argued that appellant is an authorised dealer of Maruti Udyog Limited (MUL) and is registered with the Revenue for providing Motor Vehicle Servicing, Business Auxiliary Services and Clearing and Forwarding Services. It was argued that the case of the Revenue is regardi .....

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ore Card ; (viii) Incentive on sale of Wagon R and Alto Cars ; (ix) Incentive of Free Credit ; (x) Incentive on sale to employees of LIC, SBI, Fetchers Scheme etc. ; (xi) Incentive for sale of Esteem & Maruti 800 etc. ; (xii) Misc. Spot Credit & IFC (Interest Free Credit) ; (xiii) Moss (Maruti Online Services) ; (xiv) Free Mega Checkup Camps ; (xv) Exchange Charges TV (True Value) and Non TV ; and (xvi) Free Services Charges. 2.1 Learned Advocate made the Bench go through each of the abo .....

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0]. For sale of used/pre-owned vehicles he relied upon the case law SAI Service Station Ltd. Vs. CCE, CUS & ST, Cochin - [2015 (37) S.T.R. 516 (Tri. Bang.)] to argue that Exchange Charges TV and Non-TV are not liable to service tax. With respect to commissions received from MUL it was argued that MUL has paid service tax on the gross amount received from financial institutions which is covered as per para 17 of case law CST, Mumbai I Vs. Sai Service Station Ltd. [2014 (35) S.T.R. 625 (Tri Mu .....

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nancial year 2003-2004, as against ₹ 6,12,293/- held to be paid by Commissioner. It was his case that this verification of correct service tax payment can be made by the Adjudicating Authority for correct demand on workshop service charges for financial year 2004-2005. That a short brief can be filed with respect to demand under the head delayed payment of service tax for the financial year 2003-2004 also it was argued that excess payment has been made by the appellant, which needs verific .....

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ven by MUL, on which service tax demand is proposed to be raised under BAS, are of the nature of trade discounts based on performances or are simply certain reimbursements made by MUL for Sales/Joint benefit, which can not be considered as provision of Business Auxiliary Services. Various activities/incentives involved in these proceedings are deliberated as follows :- (i) Commission on Extended Variety:- Appellant is providing certain after sales services to the customers on behalf of MUL for w .....

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tomers who have purchased Maruti Vehicles. As per the agreement between the appellant and MUL these facilities are required to be available by the appellant for which certain payments are received from MUL. Such a facility made available to the customers by the appellant is on behalf of MUL and such expenditures are reimbursed by MUL and not from dealers margin. Such an activity will be covered within the definition of BAS under Section 65 (19) (iii) of the Finance Act, 1994 and has been correct .....

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ation is defined as under : 'authorised service station' means any service station, or centre, authorised by any motor vehicle manufacturer, to carry out any service, repair, reconditioning or restoration of any motor car, light motor vehicle or two wheeled motor vehicle manufactured by such manufacturer, and the related taxable service is defined as a service rendered to a customer, by an authorised service station, in relation to any service, repair, reconditioning or restoration of mo .....

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that they do not reimburse any amount towards such free services to the dealers. The respondents have also stated that providing such free services is part of the functions and duties of dealers who are entitled to the dealership commission. Also the free services are rendered to the car buyers and not to M/s MUL and the car buyers pay nothing therefore. Seen in this light it is evident that the demand of service tax as per column 5 of the table above is misconceived. Coming to the demand of ser .....

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egory of authorised service station service." There is no evidence on record that in the present appeal also any separate consideration is received by the appellant from either MUL or the customers for providing such free service. Accordingly it is held that no service tax is payable on the free service provided by the appellant. (iv) For incentive on spare parts it is the case of the appellant that these incentives are given to the appellant for achieving certain targets of purchase of spa .....

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of free Credit, Incentive on sale of employees of LIC, SBI and Fetchers Scheme, Misc. Spot Credit and IFC, Finance pay out and National Subvention of MUL, part reimbursement of advertisement and incentive for arranging camps/sales mela and Free Mega Checkup Camps. It is the case of the appellant that all these amounts received from MUL, are either compensatory payments or in the nature of performance based trade discounts on achieving certain performance targets or is an activity which is mutual .....

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nnot be held to be classifiable as provision of taxable services of BAS under Section 65 (19) of the Finance Act, 1994. (v) On the issue of Exchange Charges True Value (TV) and non-True Value (non-TV), it is the case of the appellant that such activity is related to purchase of used pre-owned cars of Maruti and subsequently sale to other buyers after refurbishing or refurnishing. That such an activity is purely buying and selling activity of used/pre-owned cars and the same cannot be held to be .....

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