TMI Blog2021 (4) TMI 137X X X X Extracts X X X X X X X X Extracts X X X X ..... provided under Rule 4 of the Service Tax Rules, 1994. Thus, as long as services of TVSFS in relation to financing of the vehicles manufactured by the assessee promotes the sale of vehicles manufactured by the assessee, such service is taxable under Business Auxiliary Services. The Tribunal had rightly allowed the assessee's appeal - Revenue has not made out any grounds to interfere with the impugned order - Appeal dismissed. - C.M.A.No.805 of 2021 - - - Dated:- 25-3-2021 - Honourable Mr.Justice T.S.Sivagnanam And Honourable Ms.Justice R.N.Manjula For the Appellant : Mr.Rajnish Pathiyil, SCGSC For the Respondent : Mr.Raghavan Ramabadran JUDGMENT T.S.SIVAGNANAM, J. This appeal, filed by the Revenue under Section 35(G) of the Central Excise Act, 1944 ('the Act' for brevity) read with Section 83 of the Finance Act, is directed against the order dated 22.11.2018 passed by the Customs, Excise and Service Tax Appellate Tribunal, Chennai Bench ('the Tribunal' for brevity) in Final Order No.43026 of 2018. 2. The Revenue has raised the following substantial questions of law for consideration: 1. Has not the Hon'ble CESTAT falle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o Section 11(A)(1) of the Act; why appropriate interest should not be demanded under Section 11AB of the Act; why penalty should not be imposed under Rule 15 of Cenvat Credit Rules read with Section 11AC of the Act and why penalty should not be imposed on TVSFS under Rule 26(2)(ii) of the Central Excise Rules, 2002. 6. The assessee submitted their reply, stating that they sell their products through authorized dealers in various locations all over the country and they have entered into a dealership agreement with the authorized dealers, who are appointed on non-exclusive basis, for marketing, selling and servicing the products within the territory alloted to them and it was a normal practice in the automobile industries for vehicle manufacturers to enter into exclusive arrangements with finance companies to provide financial assistance to the buyers of their products. 7. The assessee has entered into a Memorandum of Understanding with TVSFS for financing the purchase of two wheelers manufactured by the assessee on exclusive basis making it clear that TVSFS cannot enter into any arrangement or agreement with any other manufacturers. Further, the assessee would state that TVSFS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd go to form part of assessable value of the goods. It was contended that irrespective of the stage of receipt of services, promotional activities carried out are only to improve the sale of the products of the assessee and hence is an input service in relation to goods cleared and therefore, the allegation of the Department that the service received by them is not connected with the continuous business cycle of the manufacture and sale of two wheelers, is incorrect. 11. Further, the assessee also submitted their reply with regard to the proposal to levy penalty and that there is no suppression or misstatement and their returns contained all details relating to the Cenvat Credit availed and utilized by them on various input services and further it is submitted that the extended period of limitation cannot be invoked. 12. Since TVSFS was also one of the noticees in the show cause notice dated 23.10.2008, they submitted a reply dated 31.03.2009, stating that the service rendered by them to the assessee is an exclusive service provided only to TVS brand vehicles. They have undertaken not to provide service to vehicles of any other brand, the retail financing extended by them pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... med. 16. Aggrieved by the same, the assessee preferred an appeal before the Tribunal, which has been allowed by the Tribunal by the impugned order. Aggrieved over the same, the Revenue is before us by way of this appeal. 17. We have elaborately heard Mr.Rajnish Pathiyil, learned Senior Central Government Standing Counsel appearing for the appellant and Mr.Raghavan Ramabadran, learned counsel for the respondent. 18. The Tribunal from paragraph 2 has set out the contentions advanced by he assessee and paragraphs 3.0 and 3.1 notes the submissions made by the authorized representative of the assessee. The discussion starts from paragraph 5 of the order and the Tribunal holds that since during the relevant period, the definition of input services included the words all activities relating to the business , it has to be concluded that the activity rendered by TVSFS is an activity relating to the business of manufacture of the assessee. Hence, the impugned service is qualified as 'input service' and the assessee is eligible for credit. 19. We fully approve all the findings rendered by the Tribunal for the reasons, which we are to render hereinafter. 20. The factual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice, placed materials to show that by virtue of this arrangement, they were able to penetrate into semi urban areas, thereby increasing the sale of two wheelers manufactured by the respondent/ assessee. 23. Thus, the expansive definition requires to be applied in this case and as noted, the Memorandum of Understanding provides for exclusive retail financing of two wheelers manufactured by the assessee, which results in promotion and expansion of sale of two wheelers manufactured by the assessee and payments are received by TVSFS from the assessee and as the services are taxable under Business Auxiliary Services, TVSFS has obtained registration under the Act, as provided under Rule 4 of the Service Tax Rules, 1994. Thus, as long as services of TVSFS in relation to financing of the vehicles manufactured by the assessee promotes the sale of vehicles manufactured by the assessee, such service is taxable under Business Auxiliary Services. 24. Therefore, we hold that the Tribunal had rightly allowed the assessee's appeal and granted the relief. Hence, the Revenue has not made out any grounds before us to interfere with the impugned order. Accordingly, the civil m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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