AI Drafter - (New and Powerful) 
Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter. 
TaxTMI 
TaxTMI 
2009 (4) TMI 118
X X X X Extracts X X X X
X X X X Extracts X X X X
....e to the free services provided by the dealer during the warranty period. The amount has been quantified on the basis of the amount received by the dealer when such free service during warranty period is rendered in respect of vehicles sold by other dealers. On the basis of above principle a demand for Rs. 5,29,500/- being the service tax has been confirmed with applicable interest and a penalty of Rs. 5,29,500/- has been imposed under Section 78 of the Finance Act, 1994. Hence the appeal. 2. Shri Hardik Modh, ld. Advocate on behalf of the appellants submitted that the issue is no longer res integra and there are several decisions of the Tribunal holding that since the transaction is of a sale and sales tax is paid including the dealers ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing food to the passengers on board the aircraft, service and sales tax both are leviable. Therefore she submits that the component of free services, the cost of which is already included in the dealer's margin is liable to service tax. She drew my attention to the letter from Maruti Udyog Ltd., wherein MUL had clarified that the dealer's margin is not included by them nor is fixed by them and they sold the vehicle at a particular price to the dealer and the dealer is free to fix his margin and sell the vehicles. Therefore she submits that the component of service and its cost is not taken into account by MUL. She also refers two other decisions in support of her contention that just because there are many decisions in favour of the party, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssions. In this case the transaction is between the dealer and buyer of the vehicle. As far as the buyer is concerned he is entitled to 3 free services. However, there is no provision for refund or rebate in case any free service is not availed by the purchaser. Therefore as far as purchaser is concerned it is an indivisible contract and the component of free services cannot be segregated. If it can be segregated, the purchaser would have been able to get services from any dealer he wanted and not necessarily the dealer of MUL only and claim rebate in respect of free services which was not availed from the MUL. Therefore I find considerable force in the arguments advanced by the ld. Advocate that the contract between the purchaser of the ve....