TaxTMI 
TaxTMI 
2023 (2) TMI 234
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....Aggrieved, this appeal has been filed by the appellant. 2. The appellant was registered with the Service Tax Department under the categories of Business Auxiliary Services [BAS], Authorized Service Station Services [ASS] and Renting of Immovable Property Service [RMPS]. It is the authorized dealer of Tata Motors Ltd. [Tata] for sale, service and spare parts of medium and heavy commercial vehicles in 5 districts of Rajasthan. The appellant was purchasing such vehicles from Tata on its own account and thereafter selling them to the customers. On sales, the appellant was paying Value Added Tax [VAT]. According to the appellant, the dealings between Tata and itself were on principal to principal basis. However, if the appellant met specific sales targets various incentives were available to the appellant as per the policy of the Tata. 3. The appellant was also authorized to service vehicles and for servicing the appellant was collecting service charges and cost of spares from its customers. The appellant was also undertaking servicing during the warranty period and for such services, the service charges were paid by Tata along with the cost of spares used in servicing during such....
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....2 as only servicing of motor cars, light motor vehicles and two-wheeler motor vehicles were taxable under section 65 (105) (zo) of Finance Act, 1994. From 01.07.2012, servicing of all types of vehicles became taxable. The Commissioner dropped the demand for the period upto 31.03.2012. For the period 01.04.2012 to 30.06.2012 since the break-up of the receipts towards services during warranty and the cost of spares and consumables used during servicing was not available, he confirmed service tax on the entire amount. The appellant has already paid VAT on the cost of spares and, therefore, service tax cannot be charged on this account. Further, according to the learned Consultant the appellant has already paid service tax on the amounts received towards labour under warranty repairs during the period 2012-2013. Learned Consultant has submitted the following break-up of the receipts during this period :- "(a) Warranty receipts of 2012-13 (cost of Spares and Consumables reimbursed By the principals on which VAT paid) 1,09,91,928.00 (b) Labour receipts Barmer 4/2012 to 6/2012 57,200.00 (c) Labour receipts Jodhpur 4/2012 to 6/2012 3,03,899.00 (d) Labour receipts....
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....a principal to principal basis in the manner provided in this Agreement. 3 (f) Nothing contained in this Agreement shall in any way operate by implication or otherwise to constitute the Dealer as an agent of the Company in any respect and for any purpose whatsoever, and it shall be absolutely unauthorized for the Dealer to represent himself as an agent of the Company or to assume or to create any obligation of any kind, expressed or implied, on behalf of the Company or bind the Company in any respect whatsoever in relation to a third party". 10. Learned Consultant submits that identical issue came up before the Tribunal in case of Rohan Motors Ltd. versus Commissioner of Central Excise, Dehradun [2021 (45) G.S.T.L. 315 (Tri. - Del.)] and Commissioner of Service Tax, Mumbai - I versus Sai Service Station Ltd. [2014 (55) S.T.R. 625 (Tri. - Mumbai)] and in both these cases, the Tribunal held that incentives received by dealers from manufacturers of automobiles for meeting sales targets are in the nature of trade discounts and are not exigible to service tax. He further submits that for a subsequent period, in their own case, the Assistant Commissioner of CGST Division - A, Jo....
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....turer. In market, buyers who purchase larger quantities of any good often get a better price. The incentives in this case are of this nature. It has already been held by this Tribunal in the case of Sai Service Station Ltd. and Rohan Motors Ltd., that such incentives are not exigible to service tax. Paragraph 2,3,14 and 22 of the order of Rohan Motors Ltd. are reproduced below:- "2. The appellant is a dealer of Maruti Udhyog Ltd.. The appellant buys vehicles from MUL for further sale to the buyers by virtue of a dealership agreement dated January 1, 2013 entered into between Maruti Suzuki India Ltd. and the appellant. Under the said agreement, the appellant receives discount from MUL, which are referred to as "incentives" under the schemes. The Department has sought to levy service tax on the incentives received by the appellant under the category of "business auxiliary service" 3. The demand has been confirmed on the following : (i) The incentive amount received by the appellant under BAS. (ii) The registration and number plate charges received by the appellant from the customers for registration of the vehicles with the Regional Transport Authority u....