TaxTMI 
TaxTMI 
2023 (8) TMI 409
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....r the services rendered by them. The cars manufactured by the appellants are sold to Authorized Dealers (dealers), who in turn sell the cars to the ultimate buyers. During the audit, it came to light that the appellant extended factory warranty to the ultimate customers for a period of two years from the sale of cars and after the completion of two years, the appellant canvases for purchase of extended warranty, scheduled plan and total maintenance plan which are optional in nature. On going through the records, it appeared to the department that the appellant is a service provider to the ultimate buyers of the cars as it is a contract between the appellant and the ultimate buyer of the car and the dealer is only a seller of the three plans....
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....8 of the Finance Act, 1994. Aggrieved by the said order, the appellant is now before the Tribunal. 3. No cross-objection has been filed by the respondent-department. 4. We have heard Shri Raghavan Ramabhadran, learned counsel for the appellant and Shri M. Ambe, learned Deputy Commissioner (AR) for the Revenue. 5. The learned counsel for the appellant submitted that the extended warranty plans are composite contracts involving labour by way of repairs and material by way of parts being replaced. Under the service tax regime, taxability on service tax portion of a composite works contract was made taxable for the first time w.e.f. 01.06.2007 vide insertion of Section 65(105)(zzzza). He placed reliance on the decision of the Hon'ble A....
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....levied on composite works contracts. The Hon'ble Supreme Court in the case of Commissioner of Central Excise and Customs, Kerala and Others Vs. Larsen and Toubro Ltd. and Others [2015-TIOL-187-SC-ST] after elaborate discussion of the various provisions and judicial pronouncements in no ambiguous terms ruled that works contract cannot be subject to Service Tax before 01/06/2007. The question which remains is whether Service Tax is leviable on composite contract for maintenance and repair of vehicle which entails both supply of goods and services for the period from 01/06/2007 up to 01/07/2012, when the negative list of services was introduced. 8.1 The facts are that the appellant offers warranty for cars manufactured by them and sold to c....
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....s • Accident repairs • Tyres • Fuel Whenever a customer invokes the extended warranty, the customer approaches the dealers, who provide the repairs and replace defective parts if necessitated. The dealers then raise claims upon the appellant for reimbursement of the value of the repairs and parts replaced. The appellant then reimburse the dealers for the claims so raised, inclusive of applicable Value Added Tax ('VAT') component on the parts replaced. The impugned order has demanded service tax on this transaction which is now under dispute before us. 8.2 Before we go forward a question arises as to whether the service of 'extended warranty' will be liable to tax under 'Repairs to Vehicle' servic....
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....r services only for immovable property, civil structures, and residential complex. Section 65(105) (zzzza) of the Finance Act, 1994 which deals with the taxability of works contract from 01.06.2007, is reproduced below; "To any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. Explanation.- For the purposes of this sub-clause, "works contract" means a contract wherein,- (i) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out,- (a) erection....
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....ve list' of services in the Finance Act 1994. After deleting the "definition section" from the Finance Act, 1994, one new Section 65B (Interpretations) has been inserted by the Finance Act, 2012. In the new system all services, except those specified in the negative list, were subject to Service Tax. Subsequently Notification No. 19/2012 ST dated 05.06.2012 was issued specifying that the new Section 65B (Interpretations), among others, would be effective from 01/07/2012. Section 65B(54) defines 'works contract' as under; "works contract" means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out constructi....