TMI Blog2022 (2) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/10/2008 - Second SCN was adjudicated by the Learned Commissioner Central Excise Service Tax Lucknow and the adjudicating authority through its Order in Original dated 08/02/2017 dropped the demand of Service tax on servicing of Motor Car, Registration Charges sale of extended warranty but confirmed the demand of Service tax on insurance commission, differential Service tax payable on account of reconciliation of ST3 returns - while adjudicating the third SCN, the adjudicating authority had confirmed the entire demand without considering the submissions documents submitted during the course of adjudication made by the appellant - HELD THAT:- It is observed that vide Final Order of this Tribunal bearing No.70112 of 2015 dated 17.12.2015, the entire demand of SCN dated 16.10.2018 on the several issues as mentioned above stands already been set aside. Apparently, no appeal has been filed by the Department against the said order. The said decision, therefore, stands attained finality - With respect to the SCN dated 24.10.2013, Department itself has dropped the demand except for demand of Service Tax on insurance commissions, advertisement expenses, reimbursement from MUL and on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een confirmed. Service tax on incentive received from MUL - HELD THAT:- It is observed that the appellant purchases vehicles from MUL and sells the same to the buyers. The agreement between appellant and MUL clarifies that appellant works on a principal to principal basis instead of working as an agent of MUL. Appellant, however, has agreed to undertake certain sales promotion activities as well. In the given circumstances, carrying out of such activities by the appellant is for the mutual benefit of the business of the appellant as well as for the business of the MUL - the amount of incentives received on such account cannot be treated as consideration for any service and the incentives received by the appellant therefore, are wrongly held livable to the Service tax. Service tax on handling and logistic charges - HELD THAT:- The copy of VAT assessment orders were also provided by the appellant. Once the liability of VAT is discharged, the demand of service tax on the same transaction is not permissible under Indian Constitution. The demand on this issue otherwise has already been set aside by this Tribunal in the Final Order dated 17.02.2015. Confirmation of the demand o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty paid challans mentioned in the ST-3 returns filed are also available in the ACES data. As per those ST-3 Returns, it is verified that the appellant has not availed any cenvat credit against the capital goods except they availed the credit against the input services received directly. Departments own verification report is, therefore, held to have falsify the confirmation of the demand on this count by the adjudicating authorities below. The confirmation is according liable to be set aside. Reimbursement of Expenses from MUL - HELD THAT:- The issue is no more res integra as has already been discussed above with respect to the decision of this Tribunal in M/S. ROHAN MOTORS LIMITED VERSUS COMMISSIONER OF CENTRAL EXCISE, DEHRADUN [ 2020 (12) TMI 1014 - CESTAT NEW DELHI] . The adjudicating authorities below are held to have ignored the decision on this issue arrived at by this Tribunal. The adjudicating authority are held to have violated the principles of judicial discipline - the confirmation of demand on this score also cannot sustain. Service tax under reverse charge mechanism on the expenses appearing in audited profit and loss account - HELD THAT:- The demand of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2022 - Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) AND Mrs. RACHNA GUPTA, MEMBER (JUDICIAL) Shri Vineet Kumar Singh, Advocate for the Appellant Shri B.K. Jain, Authorised Representative for the Respondent ORDER Present order disposes of two appeals originating out of two different Show Cause Notices but involving the similar issues. The details are as follows:- Appeal No. SCN Dt., Period Involved OIO/Order under challenge Amount Involved in Rs. 70005 24.10.2013 2008-09 2011-12 041/2016-17 Dt. 08.02.17 2,75,15,954 70567 20.11.2017 2012-13 2016-17 016/2018-19 20.02.2019 6,64,07,784 2. The appellants herein are engaged in providing authorised service station service from its two units at different premises in Lucknow. They are registered with the Service Tax Department. During a course of inquiry, the appellants were inquired about their Service Tax liability for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of service tax on the same issues. It is mentioned that both the SCNs have been issued in sheer ignorance of the judicial discipline. It is submitted that with respect to SCN dated 24.10.2013 the adjudicating authority vide order dated 08.02.2017 has dropped the demand of service tax amounting to ₹ 2,04,96,755/. However, the demand was still confirmed for ₹ 1,31,318/- on insurance commission, for ₹ 36,52,534/- on advertisement expenses reimbursed from MUL and for ₹ 23,74,011/- on different job receipts. Demand with respect to the SCN of 20th November, 2017 amounting to ₹ 6,64,07,784/- was fully confirmed vide the Order dated 20 February, 2019. In both the SCNs the Department has wrongly invoked the extended period of limitation as all the facts were very much to the notice and knowledge of the Department since the time of the first SCN issued in 2008 for the period 2003 to 2007. The order under challenge is alleged to have ignored the said fact and has also ignored the findings of this Tribunal on the same issues as have been raised in the impugned SCNs. The orders are accordingly, prayed to be set aside. 5. Ld. Counsel has relied upon the final or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 16/10/2008. Aggreived by the O.I.O, the appellant filed the appeal before the Hon ble Tribunal and the the Hon ble Tribunal through its final order dated 15/12/2015 had set aside the entire demand. ii) The Second SCN was adjudicated by the Learned Commissioner Central Excise Service Tax Lucknow and the adjudicating authority through its Order in Original dated 08/02/2017 dropped the demand of Service tax on servicing of Motor Car, Registration Charges sale of extended warranty but confirmed the demand of Service tax on insurance commission, differential Service tax payable on account of reconciliation of ST3 returns with the Balance sheet, finance payouts, reimbursement of expenses from MUL and denied CENVAT credit availed on Capital goods. iii) That while adjudicating the third SCN, the adjudicating authority had confirmed the entire demand without considering the submissions documents submitted during the course of adjudication made by the appellant. 8. It is observed that vide Final Order of this Tribunal bearing No.70112 of 2015 dated 17.12.2015, the entire demand of SCN dated 16.10.2018 on the several issues as mentioned above stands already been set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for paying service tax as per sub clause (A) thereof such person in relation to service provided or agreed to be provided by an insurance agent to any person carrying on the insurance business, the recipient of the service . It becomes clear that the recipient of insurance services is liable to pay the service tax. Admittedly appellant herein is the service provider being an insurance agent. The service recipients are the insurance companies for which the appellant had worked. Hence, it were the insurance companies, who were liable to discharge the service tax liability with respect to the amount on insurance commission received by the appellant. A copy of certificate issued by IRDA was also submitted by the appellant. The same has not been considered by the adjudicating authorities below. The confirmation of demand on this issue is therefore held to have been wrongly confirmed. 2. Service tax on finance pay outs. It is observed and has not been disputed that during the period in question, the appellant had availed cenvat credit on capital goods and had utilized the same for service tax liability on finance pay outs falling under business auxiliary services. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... side the demand on this issue for the prior period of 2003-2007. The confirmations of demand on this score is therefore liable to be set aside. 4. Service tax on handling and logistic charges. It is observed that the appellants had already submitted the invoices along with various other documents, perusal whereof show that VAT has already been discharged by the appellant on the handling charges. The copy of VAT assessment orders were also provided by the appellant. Once the liability of VAT is discharged, the demand of service tax on the same transaction is not permissible under Indian Constitution. The demand on this issue otherwise has already been set aside by this Tribunal in the Final Order dated 17.02.2015. Confirmation of the demand on this is therefore, liable to be set aside. 5. Service tax on registration charges and extended warranty. This issue is observed to have already been settled by Tribunal, Mumbai while deciding the case of Toyota Lakozy Auto Pvt. Ltd vs. CST, C.EX., Mumbai-II V reported in 2017 (52) S.T.R. 299 (Tri. Mumbai) wherein it has already been held that the facilitation charges collected from customers for registration of vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deposit of ₹ 4,16,35,200/- during the entire disputed period. The challans summary as submitted is sufficient to show that excess amount of service tax pertaining to business auxiliary services on this count stands already paid by the appellant. Departments own verification report in respect of the reply submitted by the appellants in respect of SCN dated 20.12.2017 as was called by Superintendent CGST, Lucknow from Jt. Commr., CGST, Lucknow is also produced by the appellant. The said report dated 21.02.2019 also confirms the payment of service tax in lieu of business auxiliary service and repair, reconditioning of motor vehicles by 23 challans as mentioned in the said report which were found duly included in the list of 265 challans amounting to a total of ₹ 4,13,40,105/-. Both the orders under challenge have been passed prior to the said verification report. However, in the light of said verification report, it stands clear that the demand on this account also cannot be confirmed. 7. Non Reconciliation of ST-3 Return with Balance Sheet and Cenvat Credit on Inadmissible Documents. The verification report as mentioned above has verified that total 8 ST-3 R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Corporation Ltd. reported in 1991 (55) ELT 433 (SC) has held as follows:- The Supreme Court noticed that the order passed by the Assistant Collector not only ignored the order of the Collector (Appeals) remanding the matter, but also distinguished the decision of the Tribunal by observing that the decision of the Tribunal had not been agreed to by the Department as an Appeal had been filed in the Supreme Court. The assessee filed a writ petition in the Bombay High Court to challenge the said order of the Assistant Collector. The High Court not only quashed the order passed by the Assistant Collector but also directed the Department to allocate the matter to a competent officer for passing a proper order. It is against this decision of the Bombay High Court that the Union of India preferred an Appeal before the Supreme Court. The Supreme Court observed as follows :- The High Court has, in our view, rightly criticized this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasized that it is of utm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not sustainable as the documents produced by the appellant clarifies that those expenses pertain to the payment of the paid to the banks for enhancement and renewal of limits and also for payment to Chartered Accountants and other technical consultants. All such expenses have duly been mentioned in their profit and loss account which were duly got verified vide the verification report of 21.02.2019 as was submitted by Jt. Commissioner, CGST. The demand on this account is also therefore, held not sustainable. 12. As a result of entire above discussion, it is clear that the demand has wrongly been confirmed vide both the orders under challenge. The orders under challenge are liable to be set aside. 13. Coming to the issue of invoking extended period of limitation, it is not denied that the records of appellant were earlier also audited for the period 2003-2007 and an earlier SCN of 16.120.2008 was issued upon the appellants. It is also not denied that the ST-3 Returns were regularly being filed by the appellant. Department own verification report verifies the availability of the duty paid challans as mentioned in those ST-3 Returns in ACES data. It becomes abundantly clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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