TaxTMI 
TaxTMI 
2023 (10) TMI 58
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....cts of the case are that the appellants are authorised dealers for selling and servicing of Hyundai cars manufactured by M/s. Hyundai Motors India Ltd. (HMIL, for short) During the warranty period, the appellant provided free services to the customers who purchased the new motor cars from the appellants. As per Clause 4.4 of the agreement entered into between HMIL and the appellant, they were not permitted to charge customers for any services for which the appellant is reimbursed by the HMIL for repairs carried out during the warranty period and other free services. Alleging that the amount reimbursed to the appellant is chargeable to service tax for the period April 2006 to March 2007 in terms of Service Tax (Determination of Value) Rules,....
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....e policies & procedures as notified by HMI from time to time. 6.2 From the above, it is evident that the show-cause notice as well as the orders of both the lower authorities are based on Clause 4.4 of the dealership agreement, which is not related to free warranty. Free warranty is provided in terms of clause 7.3 of the agreement. The said clause does not provide for any reimbursement. Even from the language of clause 4.4, it does not flow that the repairs covered under warranty are reimbursable. Reference to reimbursement is in relation to any services for which dealer is reimbursed by HMT without limitation. 6.3 We also find that the issue of liability to service tax for free services provided to car purchasers by the authorised....
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....lso the free services are rendered to the car buyers and not to M/s. MUL and the car buyers pay nothing therefor. Seen in this light it is evident that the demand of service tax as per column 5 of the table above is misconceived. Coming to the demand of service tax on the amount received on account of salary of drivers of vans used for providing mobile service to the car owners shown in column 4 of the table, it is evident that the customer in this case is the car owner who is the recipient of service. M/s. MUL receive no service nor are M/s. MUL, the respondents' customers. Thus the respondents have not provided the service of authorised service station to them (i.e. M/s. MUL). Accordingly this amount cannot be made liable to service tax u....
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.... constitutional scheme of things, there is mutual exclusivity between the taxability of sale of goods, which is charged to sales tax by the State; the excise duty on manufactured goods which is levied by the Centre; and the tax on services, which is also levied by the Centre. The impugned amount in question is a part of the dealers' margin which has been recovered by the appellants as a part of the sale value of the cars from the customers and the entire amount has been subjected to sales tax by the concerned State Government authorities. When the appellants sold the cars and recovered the amount including the dealers' margin, the dominant intent, was to sale the goods, namely, cars and not to provide free after sales service. In our view, ....