TaxTMI 
TaxTMI 
TaxTMI 
2014 (4) TMI 640
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....activity undertaken by Maruti True Value Division of exchanging old cars of the customers for new cars, amounts to provision of business auxiliary service and the difference between the sale price of the old cars and the purchase price has to be treated as remuneration for providing this service, proceedings were initiated. The proceedings have culminated in confirmation of service tax demand of Rs. 53,76,644/- with interest for the period from 1.10.2006 to 30.9.2011. Penalties under various sections of Finance Act have also been imposed. 2. Learned counsel for the appellant submits that the activity undertaken by them is merely purchase of old vehicles and selling it to customers who are willing to buy the same. She submits that in the im....
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.... treated the entire transaction as purchase of old vehicles and sale of the same to the customers. The applicable VAT for transaction of old vehicles has also been paid by the appellant when such old vehicles were sold which would also support that the entire transaction is one of purchase and sale. 3. Learned A.R. on the other hand submits that the entire transaction cannot be considered as sale since the registration never gets transferred to the appellant. He pointed out that in the show-cause notice details of the transaction undertaken by the appellants have been given. 4. He also submits that the Commissioner has considered the submissions made by them on sale and purchase and has held that sale and purchase is completed only when t....
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....d below: 55. On a scrutiny of the financial accounts, summary statement/replies submitted by M/s Sai and the data available with me, I find that M/s Sai is engaged in the business of selling used/pre-owned cars belonging to their clients through their Maruti True Value Division under the MUL Dealer ship and provide services to handle, refurbish, promote or market pre-owned/used vehicles provided by their clients. It is observed that when a client comes to them for sale of his vehicle, they evaluate the vehicle according to certain norms specified by MSIL, based on the year of manufacture, condition of the vehicle and thereafter, fix a price after analyzing....
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....ansferred to a new buyer and issue a possession letter as an evidence of taking possession of the vehicle, insurance documents etc. in original. He has also observed that at the time of taking possession signatures on blank forms as prescribed in the Motor Vehicles Act for transfer of ownership of vehicles are obtained. Thereafter the vehicle is sold at a price which includes management fee, free services and warranty etc. The above observation would show that the Commissioner himself observed that the old car owners come to the appellants for selling their vehicles and they hand over all the documents and receive the agreed price and the possession of the vehicle is also transferred. The conclusion that appellants are rendering a service a....
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....ce. There may be a contract of sale between one part-owner and another. (2) A contract of sale may be absolute or conditional. (3) Where under a contract of sale the property in the goods is transferred from the-seller to the buyer, the contract is called a sale, but where the transfer of the property in the goods is to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell. (4) An agreement to sell becomes a sale when the time elapses or the conditions are fulfilled subject to which the property in the goods is to be transferred. Once the price is received and the property is delivered, the sale is complete. Going by the definition of sale, when the property is d....
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....y undertaken to increase the value of the vehicle so that they get the maximum return out of it. Therefore we cannot say that there is a service element in this transaction either. As regards the invoices produced before us there is no clarity being there as to whether the Commissioner has seen these documents. We find that the Commissioner has observed that he has scrutinized the financial accounts, reply submitted and the data available with him. Moreover, at the time of investigation it is difficult to believe that no invoices were recovered. In any case there is no observation saying that the vehicles were not sold under an invoice by the appellants. Therefore we do not find any merit in this submission. Since we have considered the fa....