TMI Blog2023 (12) TMI 1069X X X X Extracts X X X X X X X X Extracts X X X X ..... made to the decision of the Tribunal in the case of SYNIVERSE MOBILE SOLUTIONS PVT LTD., (EARLIER TRANSCIBERNET INDIA PVT LTD.) VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, HYDERABAD IV [ 2023 (6) TMI 463 - CESTAT HYDERABAD] where it was held that On this issue it is seen that Tribunals have been consistently holding that it is essential for the Show Cause Notice issuing authority to clearly indicate the sub-clause under which the service tax in question would fall. Demand of Service Tax on spares and parts - HELD THAT:- It is found from the documents placed on record at Page No. 116 to 124 of the Appeal Paper book that services and spares are charged separately from the manufacturer for the warranty period and service tax was paid on the value of services and on the value of spare parts, VAT/Sale Tax was paid as the sale of spare parts is considered to be sale of goods and liable to VAT. Therefore, the service tax is not leviable on the sale of spare parts - reference made to Department Circular No. 699/15/2003-CX dated 05.03.2003 which specifically clarifies that the sale of parts, accessories and consumables are not includible in the value of taxable s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals are directed against the common impugned order dated 29.06.2012 passed by the Commissioner of C. Ex., Service Tax, Chandigarh whereby the Ld. Commissioner has confirmed the demand of Service Tax of Rs. 18,11,691/- under Section 73 of the Finance Act, 1994 alongwith interest under Section 75 of the Finance Act, 1994 by invoking the extended period of limitation. The Commissioner dropped the penalties under Section 76, 77 and 78 of the Act by giving the benefit of Section 80. 1.1 Aggrieved by the dropping of penalty, the Revenue has also filed appeal No. ST/3368/2012 and in the Revenue s Appeal, the assessee has filed the cross objection. 1.2 Since, both the appeals are arising out of same impugned order, therefore, both are taken up together for discussion and disposal. 2. First we take up the Assessee s appeal, the brief facts of the present case are that the appellant is an authorised dealer of motor vehicles of automobile manufacturers such as Maruti and Tata and their relationship are governed by a dealership agreement which is on record of the appeal paper book. The Appellant purchases vehicles from manufacturers and sells them to retail customers. The Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w as the same has not been passed without properly appreciating the facts and law and the binding judicial precedents. She further submits that in the impugned show cause notice, no specific clause of Section 65(19) was mentioned by the adjudicating authority while proposing the said demand as well as while confirming the demand. She relied upon the following decisions wherein it has been held that specific clause of Business Auxiliary Service is required to be mentioned in the show cause notice/adjudication order :- Jagjeet Singh Parwana vs. Commissioner of Central Excise and Service Tax, Chandigarh-II 2023 (8) TMI 407 - CESTAT CHANDIGARH Confederation Of Indian Industry Versus Commissioner of Central Excise Service Tax, Chandigarh-1 2023 (7) TMI 57 - CESTAT CHANDIGARH Syniverse Mobile Solutions Pvt Ltd., (Earlier Transcibernet India Pvt Ltd.) vs. Commissioner of Customs, Central Excise Service Tax, Hyderabad - IV Service Tax Appeal No. 1319 of 2010, order dated 31.05.2023. Balaji Enterprises Versus Commissioner of Central Excise and Service Tax, Jaipur-l 2020 (33) G.S.T.L. 97 (Tri. - Del.) She further submits that the impugned order itself has failed to sp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd no credit on the duty paid by the Appellant has been availed and the same is undisputed by the department. 4.4 She further submits that the show cause notice does not mention any allegations in respect of amount received under the head Authorised service stations whereas the impugned order upholding the demand under a new head of 'Authorized Service Station' is clearly beyond the scope of show cause notice and violative of principles of natural justice and the demand to that extent is liable to be set-aside. 4.5 She further submits that another demand has been confirmed on the amount of incentive received from the Atlantic for buying minimum quantity of goods from them whereas such receipt of incentive/trade discount is not towards provision of any service at all which is also evident from the agreement dated 01.10.2009. Therefore, the Ld. Counsel submits that the demand of Service tax on such amount under Business Auxiliary Service is clearly not sustainable. 4.6 She further submits that the Tribunal has consistently held that the demand of service tax is not sustainable on incentive or trade discount received on buying minimum quantity of goods as it does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no wilful suppression of any fact relating to the activities carried on by the Appellant and the Appellant was made subject to regular audit by the department from time to time and thus the department was very well aware about the activities of the Appellant. Moreover, the demand was raised on the basis of the audit objections. 4.11 Further, the issue involves interpretation of the provisions, she also submits that when the demand itself is not sustainable, the demand of interest is liable to be set-aside. 5. On the other hand, the Ld. DR reiterated the findings in the impugned order. 6. The Department has also filed Service Tax Appeal No. 3368 of 2012 against the same impugned order passed by the Ld. Commissioner dropping the penalty under Section 76, 77 and 78 of the Finance Act, 1994 by invoking the provision of Section 80 of the Finance Act, 1994. 7. Ld. DR for the Department submitted that the order for dropping the penalty under Section 76, 77 and 78 is bad in law because the Ld. Commissioner has confirmed the demand of the Respondent for the extended period alongwith interest by invoking the provisions of the proviso of Section 73(1) of the Finance Act but refra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty under Section 76, 77 and 78 of the Act on demand of service tax amounting to Rs. 18,11,691/-, the Ld. Counsel for the assessee-respondent submits that when the demand of service tax is itself not sustainable, the penalty cannot be imposed. 9. After considering the submissions of both the parties and perusal of material on record, we find that neither in the show cause notices, nor in the impugned order, the Ld. Commissioner has mentioned any specific clause of Section 65 (19) of Business Auxiliary Service (BAS) under which service tax demand is sought to be made. We also find that the Tribunal has consistently taken the view in the decisions cited (supra) that specific clause of Business Auxiliary Service is required to be mentioned and if not mentioned, the entire demand is liable to be set-aside. In this regard, we may refer to the decision of the Tribunal in the case of Syniverse Mobile Solutions Pvt. Ltd. vs. Commissioner of Customs, Central Excise Service Tax, Hyderabad-IV vide Final Order No. A/30152/2023 dated 31.05.2023 wherein the Tribunal in Paras 11 and 12 has observed as under:- 11. Coming to the very first preliminary objection raised by the Appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the appellants are classifiable under both Business Auxiliary Service as well as Business Support Service . Having reproduced the findings of the Commissioner in the impugned order and having observed that I am in agreement with the aforesaid findings of the Commissioner , there was no need to come to such a weird conclusion of classifying the service under more than one head. [emphasis supplied] In the recent decision of CESTAT, Delhi in the case of Balaji Enterprises Vs CCE and ST, Jaipur [2020(33) GSTL 97 (Tri-Del)] the Bench has considered in the case of Collector Vs Pradyumna Steel Ltd., [1996 (18) ELT 441 (SC)] which is cited by the Learned AR in that case and the Hon ble Bench has held as under: 28 . Likewise, the decision of the Supreme Court in Collector of Central Excise, Calcutta v. Pradyumna Steel Ltd. [1996 (82) E.L.T. 441 (S.C.)] would also not come to the aid of the Department. This decision holds that mere mention of a wrong provision of law, when power that has been exercised is available under a different provision, is by itself not sufficient to invalidate the exercise of that power. 29 . The impugned order, therefore, can be set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tween the parties which is placed at Page No. 195 to 200 of the Appeal Paper Book. 9.3 Further, we also find that Atlantic Lubricants and Specialities Pvt. Ltd. has also filed undertaking dated 12.07.2012 wherein they have stated that as a general practice of industry we have advanced a sum of Rs. 17,50,000/- towards upfront margin discount support. 9.4 Further, we also find that the decisions relied upon by the appellant cited (supra) wherein the Tribunal has held that the demand of service tax is not sustainable on incentives and trade discounts received on the buying minimum quantity of goods. In this regard, we may refer to the decision of the Tribunal in the case of M/s D D Motors cited (supra) wherein the Tribunal in Para 6 has held as under:- Thus, on the question of whether the service tax is leviable on the amount of incentive received by the appellant from M/s Maruti Udyog Ltd. for achieving certain sales targets, we hold that same is not taxable under the category of the business auxiliary service as same being in the form of a trade discount received by the appellant from the supplier of vehicles. 9.5 As regards the demand of service tax under Busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... observation that the adjudication order had failed to refer to any evidence as to financial institutions paying commission to the assessee for providing loan to their customers, who are secured through the efforts of the assessee and there was no record of the assessee s efforts in having provided any such service to the financial institutions. It was held that mere presence of the financial institutions in the assessee s premises and receiving a consideration for lease of table space, would not amount to BAS. This judgment is therefore not an authority for a principle that all transactions between an automobile dealer and bank/financial institutions, involving presence of such financial institutions in the premise of the dealer, would amount to BAS. There can be no dispute that mere providing of a table space in an assessee premises would not per se amount to BAS. 21 . Where mere space is provided along with furniture for facilitating accommodation of representatives of financial institutions in the premises of an automobile dealer and consideration is received for that singular activity, such consideration may perhaps constitute a rent for the provision of space and associate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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