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TMI Blog2025 (5) TMI 1369X X X X Extracts X X X X X X X X Extracts X X X X ..... ank Yadav, Authorised Representative for the respondent ORDER BINU TAMTA : 1. Challenge in the present appeal is to the impugned Order Order-in-Original No.JAI-EXCUS-000-COM-30-19-20 dated 25/26.09.2019 confirming the demand of service tax amounting to Rs.4,17,65,118/- under Section 73(2) of the Finance Act, 1994 Finance Act, 1994 read with Section 174 of the CGST Act, 2017 Act, 2017 along with interest and penalty of equivalent amount and further imposing penalty of Rs.10,000/- under Section 71(1) of the Act read with Section 174 of the Act, 2017 and penalty of Rs.1,00,000/- on Shri Bhaskar Joshi, Manager (Accounts) and Authorised Signatory under Section 78A of the Act. 2. The appellant is an authorized dealer of M/s.Maruti Suzuki Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Having heard both the sides and on perusal of the records, we find that the issue which arises for our consideration is whether service tax is leviable on incentives/discount, reimbursement extended by MSIL to the appellant. 6. The issue is no longer res integra and as referred to by the Learned Counsel for the appellant the same has been considered and decided in favour of the assessee in the following cases : (i) Rohan Motors Limited v. Commissioner of Central Excise [2021 (45) G.S.T.L. 315 (Tri. - Del.) = [2020] 122 taxmann.com 24 (New Delhi - CESTAT) (ii) T.V. Sundram Iyengar & Sons Pvt. Ltd. v. Commissioner of CGST & C. Ex., Madurai [2021 (55) G.S.T.L. 144 (Mad.)] (iii) B.M. Autolink v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufacturer M/s. Maruti Suzuki India Ltd. on the basis of yearly performance of sale grants the discount to the dealer, this discount is nothing but a discount in the sale value of the vehicle sold throughout the year therefore these sales discount in the course of transaction of sale and purchase of the vehicles hence, the same cannot be considered as service for levy of service tax." 8. The Larger Bench of this Tribunal in the case of Kafila Hospitality and Travels Pvt. Ltd. (supra) dealt with the issue whether service tax can be levied under the category of "Business Auxiliary Service" on target based incentives paid to the travel agents by the Airlines as they were promoting and marketing the business of the Airlines. The Tribunal took t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular supply. The relevant portion of the decision of the Federal Court is reproduced below :- 53. On analysis, the so-called supplies for consideration identified by the Commissioner are nothing more than the encouragement of an overall business relationship between the manufacturer and the dealer to the mutual benefit of both. The relationship involves a whole raft of obligation from one to the other all, presumably, with the ultimate objective of maximizing their respective commercial positions. As the A.P. Group put it, the overall relationship contemplates a continuing dialogue between wholesaler and retailer in which promises are routinely exchanged, but to characterize this dialogue as involving supply after supply is unrealistic a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red between MSIL and the appellant and we find that MSIL is engaged in manufacturing, marketing and selling of motor vehicles and the appellant purchases the vehicles from the manufacturer as their authorised dealer. The relationship between the appellant and MSIL is only of buyer and seller and sale-purchase have taken place on principal to principal basis. 10. We also find that the activity undertaken by the appellant is for the sale and purchase of the vehicle and the incentives are in the nature of trade discounts. The incentives, therefore form part of the sale price of the vehicles and have no correlation with the services to be rendered by the appellant. That in terms of the dealership agreement, the appellant purchases the vehicles ..... X X X X Extracts X X X X X X X X Extracts X X X X
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