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TaxTMI 
TaxTMI 
TaxTMI 
2018 (4) TMI 908
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....lers. The dealers collected the amount for extended warranty from the customers on behalf of the appellants and remitted the same to the appellants after deducting their commission amount and service tax thereon. During the audit, it was also found that the appellants were providing Fleet Management Service under Business Support Services from 01.04.2007 to 30.06.2012. It was found that the appellants provided such services to corporate customers under the trade mark "Maruti N2N, Complete Fleet Solutions" in relation to vehicle manufactured by them. The appellants did not offer vehicles on lease to its corporate customers, but they engaged lease finance company as lessor for providing vehicles on lease. The corporate customers wishing to take on lease vehicles manufactured by the appellants entered into a tripartite leasing and fleet management agreement with the finance company and Maruti Suzuki India Ltd (MSIL) / Maruti Udyog Ltd (MUL). The finance company appointed MSIL/MUL as its attorney to provide vehicles on lease to corporate customers. Thus, the finance company provides the lease of vehicles to the corporate customers and MSIL/MUL provides fleet management service to such ....
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....vs. CST - 2017-TIOL-2166-CESTATDEL. (iv) Hindustan Aeronautics Ltd. vs. CST - 2017-TIOL-3591-CESTAT-BANG. 3.2 On the second issue, Ld. Advocate contended that their role was to provide value added maintenance and repair service including periodic inspection, servicing, over-haul and repair and chauffer services. The appellant is discharging its service tax liability on the chauffer charges under the manpower supply service. He invited attention to the tripartite agreement, wherein the fleet management and fleet management charges were defined. Referring to the definition of "Business Support Service ('BSS')", he claimed that the expression "Infrastructural Support Service" referred to only outsourced service as held by the Tribunal. He claimed that the services provided by them are neither covered under the Explanation portion nor under the inclusive portion of the definition of BSS. He referred to Circular No. 334/4/2006-TRU dt. 28.02.2006 which clarifies that the purpose behind introduction of BSS is to tax outsourced services, which are used in the business or commerce. He also submitted that the service of maintenance or repair of motor vehicles has been excluded from the ta....
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.... The Maruti vehicle must be delivered by Maruti authorized dealer and set up, serviced by Maruti authorized dealer/service station as per MUL recommended periodic maintenance schedule. b) The contract form with contract no. must be filed by the dealer and customer should retain the same. c) The extended warranty contract must have been registered with the dealer, and the dealer must have in turn registered with MUL. d) The Maruti vehicle must not be used for commercial purposes, including without limitation usage as taxi. e) The maruti vehicle must be under warranty at the time of purchase of contract." 6.2 The contention of the appellants that they are providing the assurance to the customers is to be viewed in the context of the agreement and the definition above. The word assurance is not mentioned in contract and it repeatedly speaks of warranty and "components covered/not covered". The qualification in agreement that the vehicle should be under warranty at the time of EWC and should be serviced as per "Periodic Maintenance Schedule" shows that it is a contract for repairs of the vehicle. Admittedly, the appellants have already collected the taxable value in advance....
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....a debatable issue involving question of law and facts and would be examined at the stage of final regular hearing. However, we note that the major part of the demand in respect of Issue No.1 is within the normal period of limitation. 6.6 In view of the foregoing, we hold that the appellants have not been able to make a prima facie case for waiver on this issue in their favour. Therefore, we direct to the appellants to deposit 10% of the service tax demanded on Issue No.1 within eight weeks subject to which the remaining amount of service tax, interest and penalty thereon will stand waived. 7. Issue No. 2 (Fleet Management Service). 7.1 We find that the Revenue has sought to levy service tax on the fleet management service under Business Support Service. The definition of "Support Service of business or commerce" is as under:- "support services of business or commerce" means service provided in relation to business or commerce and includes evaluation of prospective customers, telemarketing, processing of purchase orders and fulfillment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, account....
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....uring activity are of altogether different nature." Accordingly, we hold that on Issue No.2, the appellants have made a prima facie case of waiver of the service tax demanded, interest and penalty thereon. 8. Appellants have not pleaded any financial difficulty. 9. In view of the foregoing, appellants are directed to make a pre-deposit of 10% of the service tax demanded on the Issue no.1 (Optional extended warranty service) within eight weeks. Subject to the appellants depositing the same, the remaining amount of service tax, interest and penalty will stand waived till the final disposal of the appeal. Ashok Jindal Member (Judicial) Devender Singh Member (Technical) Per : Ashok Jindal 10. I have gone through the order drafted by learned Brother Member (Technical). I do agree with the observations made by ld. Member (Technical) with regard to Issue No. 2, i.e. 'Optional Extended Warranty Service', I am having my reservations, therefore, I am writing separate order. 11. As the facts of the case are not in dispute therefore, the same are not repeated here for the sake of brevity. Further, I find that in addition to the arguments advanced, the ld. Counsel for the appe....
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....iews and difference of opinion between the Members, therefore, the matter be placed before the Hon‟ble President to refer the matter to the third member to resolve the following issue :- POINTS OF DIFFERENCE (a) Whether the appellant is required to make the pre-deposit of 10% of service tax demand with respect to Optional Extended Warranty Service, as held by Member (Technical) that the appellant has not made out a prima-facie case for waiver of pre-deposit; or (b) Whether the Member (Judicial) is correct in holding that in the light of decision of Hon'ble Apex Court in the case of Larsen & Toubro Limited (supra), the activity undertaken by the appellant of Optional Extended Warranty Service is classifiable under 'Works Contract service' and therefore, the appellant is not required to pay any amount as pre-deposit for the activity undertaken by the appellant. Devender Singh Member (Technical) Ashok Jindal Member (Judicial) Per : Mr. Anil G. Shakkarwar 14. Heard on the difference of opinion. 15. The Ld. Counsel for appellant has submitted that the issue involved is in respect of optional extended warranty scheme where an optional extended warranty is provided to the....