TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Appellant wins service tax credit dispute on vehicle parts and sales incentives</h1> <h3>M/s UTTAM TOYOTA Versus COMMISSIONER OF CENTRAL EXCISE, GHAZIABAD</h3> The Tribunal found in favor of the appellant, a dealer of vehicles, in a dispute over the denial of service tax credit on different categories of ... Application for stay - authorised service station - Demand - Held that: the sale of parts and components during rendering services during warranty period cannot be treated as part of the services - Merely because these items were used in undertaking the repairs /maintenance, the same may not become part of the services undertaken - Therefore, the demand of about Rs.1.88 crores is not, prima facie, sustainable Regarding the demand of service tax on the incentives - To treat the value as representing the value of business auxiliary services, is prima facie not correct. And therefore, the demand of about Rs.75.23 is also not, prima facie, sustainable - The claim of the learned advocate that the demand is barred by limitation also requires to be gone into at the time of final hearing - Decided against the assessee by way of direction to deposit Rs. 40,00,000 Issues:1. Denial of service tax credit on different categories of services.2. Liability to pay service tax on activities undertaken.3. Demand related to sale of parts and components during warranty period.4. Demand related to sales incentives given by the manufacturer.5. Denial of credit on event management services and advertisement.6. Financial hardship plea.Denial of service tax credit on different categories of services:The appellant, a dealer of vehicles, was appointed for after-sale services by a manufacturer. The dispute involved the denial of service tax credit under different categories of services. The original authority demanded service tax amounting to Rs.3,83,11,405 along with interest and penalties. The advocate argued that certain demands were not sustainable, such as the demand related to the sale of parts and components during the warranty period. The Tribunal found merit in the submissions, stating that these items were not uniformly provided to every service recipient and were customer-specific. The demand was held not sustainable.Liability to pay service tax on activities undertaken:The dispute also revolved around the liability to pay service tax on activities undertaken by the appellant. The advocate contested various demands, including those related to event management services and advertisement. The Tribunal noted that these demands were contentious and required detailed examination during the final hearing. Additionally, the claim that the demand was barred by limitation and the plea of financial hardship were raised. However, no concrete evidence of financial hardship was presented.Demand related to sale of parts and components during warranty period:Regarding the demand related to the sale of parts and components during the warranty period, the Tribunal found that such sales cannot be treated as part of the services provided. These items were sold based on the condition of the vehicle and customer needs, with VAT or sales tax already paid on them. The demand was deemed not sustainable as the items were not considered part of the services rendered.Demand related to sales incentives given by the manufacturer:The demand concerning sales incentives given by the manufacturer to the appellant was also challenged. The incentives were linked to the sale of excisable goods and had a direct relationship with the value of goods sold. The Tribunal held that treating the incentives as representing the value of business auxiliary services was not prima facie correct. Therefore, this demand was also considered not sustainable.Financial hardship plea:The appellant raised a plea of financial hardship, but failed to provide substantial evidence in this regard. Despite this, the Tribunal directed the appellant to deposit a sum of Rs.40,00,000 within 12 weeks and waived the pre-deposit requirement of the balance amount of service tax, interest, and penalties until the appeal's disposal.
TaxTMI 
TaxTMI 
