TaxTMI 
TaxTMI 
2023 (12) TMI 1069
X X X X Extracts X X X X
X X X X Extracts X X X X
....3368/2012 and in the Revenue's Appeal, the assessee has filed the cross objection. 1.2 Since, both the appeals are arising out of same impugned order, therefore, both are taken up together for discussion and disposal. 2. First we take up the Assessee's appeal, the brief facts of the present case are that the appellant is an authorised dealer of motor vehicles of automobile manufacturers such as Maruti and Tata and their relationship are governed by a dealership agreement which is on record of the appeal paper book. The Appellant purchases vehicles from manufacturers and sells them to retail customers. The Appellant also maintains a service station for servicing, repairing etc. of motor vehicles supplied by them during the warranty period and while providing service, the Appellant has also been utilizing certain spares and parts and recovers service tax on labour charges and recovers the amount relating to spares used during the repair from the manufacturer of motor vehicles. 2.2 The Audit of the appellant was conducted by the department for the period 2005-06 to 2009-10, it was noticed that they had received various incentives/commissions on account of insurance, sales of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oner of Central Excise and Service Tax, Chandigarh-II 2023 (8) TMI 407 - CESTAT CHANDIGARH • Confederation Of Indian Industry Versus Commissioner of Central Excise & Service Tax, Chandigarh-1 2023 (7) TMI 57 - CESTAT CHANDIGARH • Syniverse Mobile Solutions Pvt Ltd., (Earlier Transcibernet India Pvt Ltd.) vs. Commissioner of Customs, Central Excise & Service Tax, Hyderabad - IV Service Tax Appeal No. 1319 of 2010, order dated 31.05.2023. • Balaji Enterprises Versus Commissioner of Central Excise and Service Tax, Jaipur-l 2020 (33) G.S.T.L. 97 (Tri. - Del.) She further submits that the impugned order itself has failed to specify the specific clause of the provision in which the demand has been confirmed and therefore, the impugned order is liable to be set aside. 4.1 With regard to demand of service tax on spares and parts, the Ld. Counsel for the appellant submits that the price of spares and parts are not includible in the assessable value of services which are rendered by the appellant. Ld. Counsel referred to some of the documents showing that the services and spares are charged separately from the manufacturer for the warranty provide....
X X X X Extracts X X X X
X X X X Extracts X X X X
....to that extent is liable to be set-aside. 4.5 She further submits that another demand has been confirmed on the amount of incentive received from the Atlantic for buying minimum quantity of goods from them whereas such receipt of incentive/trade discount is not towards provision of any service at all which is also evident from the agreement dated 01.10.2009. Therefore, the Ld. Counsel submits that the demand of Service tax on such amount under Business Auxiliary Service is clearly not sustainable. 4.6 She further submits that the Tribunal has consistently held that the demand of service tax is not sustainable on incentive or trade discount received on buying minimum quantity of goods as it does not pertain to any service provided. In support of this submission, she relied upon the following decisions:- • D.D. Motors vs. The Commissioner of Central Excise 2018 (11) TMI 1763- CESTAT NEW DELHI • Rohan Motors Limited vs. Commissioner of Central Excise, Dehradun 2020 (12) TMI 1014 - CESTAT New Delhi • BM Autolink vs. C.C.E. -Kutch (GANDHIDHAM) 2022 (12) TMI 12 - CESTAT AHMEDABAD • My Car Pvt. Ltd. vs. Commissioner of Central Exci....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... provisions, she also submits that when the demand itself is not sustainable, the demand of interest is liable to be set-aside. 5. On the other hand, the Ld. DR reiterated the findings in the impugned order. 6. The Department has also filed Service Tax Appeal No. 3368 of 2012 against the same impugned order passed by the Ld. Commissioner dropping the penalty under Section 76, 77 and 78 of the Finance Act, 1994 by invoking the provision of Section 80 of the Finance Act, 1994. 7. Ld. DR for the Department submitted that the order for dropping the penalty under Section 76, 77 and 78 is bad in law because the Ld. Commissioner has confirmed the demand of the Respondent for the extended period alongwith interest by invoking the provisions of the proviso of Section 73(1) of the Finance Act but refrained from imposing penalty against the respondent under Section 76, 77 and 78 of the Act as proposed in the show cause notice. 7.1 He further submits that the Respondent has suppressed the material facts from the department regarding the receipt of various commissions/incentives and the same were detected during the course of audit. He further submits that when the demand is confirm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e parties and perusal of material on record, we find that neither in the show cause notices, nor in the impugned order, the Ld. Commissioner has mentioned any specific clause of Section 65 (19) of Business Auxiliary Service (BAS) under which service tax demand is sought to be made. We also find that the Tribunal has consistently taken the view in the decisions cited (supra) that specific clause of 'Business Auxiliary Service' is required to be mentioned and if not mentioned, the entire demand is liable to be set-aside. In this regard, we may refer to the decision of the Tribunal in the case of Syniverse Mobile Solutions Pvt. Ltd. vs. Commissioner of Customs, Central Excise & Service Tax, Hyderabad-IV vide Final Order No. A/30152/2023 dated 31.05.2023 wherein the Tribunal in Paras 11 and 12 has observed as under:- 11. Coming to the very first preliminary objection raised by the Appellant that the Show Cause Notice has failed to correctly specify the clause under which the Appellant services will fall, on perusal of the Show Cause Notice it is seen that the entire portion of Section 65(19) pertaining to Business Auxiliary Services has been extracted at Para 2 of the Show ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....issioner", there was no need to come to such a weird conclusion of classifying the service under more than one head."[emphasis supplied] In the recent decision of CESTAT, Delhi in the case of Balaji Enterprises Vs CCE and ST, Jaipur [2020(33) GSTL 97 (Tri-Del)] the Bench has considered in the case of Collector Vs Pradyumna Steel Ltd., [1996 (18) ELT 441 (SC)] which is cited by the Learned AR in that case and the Hon'ble Bench has held as under: 28. Likewise, the decision of the Supreme Court in Collector of Central Excise, Calcutta v. Pradyumna Steel Ltd. [1996 (82) E.L.T. 441 (S.C.)] would also not come to the aid of the Department. This decision holds that mere mention of a wrong provision of law, when power that has been exercised is available under a different provision, is by itself not sufficient to invalidate the exercise of that power. 29. The impugned order, therefore, can be set aside only on this ground as the show cause notice does not mention which service out of the seven services specified in Section 65(19) of the Act was undertaken by the Appellant.[emphasis supplied] 9.1 As regards the demand of Service Tax on spares and parts, w....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of industry we have advanced a sum of Rs. 17,50,000/- towards upfront margin & discount support. 9.4 Further, we also find that the decisions relied upon by the appellant cited (supra) wherein the Tribunal has held that the demand of service tax is not sustainable on incentives and trade discounts received on the buying minimum quantity of goods. In this regard, we may refer to the decision of the Tribunal in the case of M/s D D Motors cited (supra) wherein the Tribunal in Para 6 has held as under:- "Thus, on the question of whether the service tax is leviable on the amount of incentive received by the appellant from M/s Maruti Udyog Ltd. for achieving certain sales targets, we hold that same is not taxable under the category of the business auxiliary service as same being in the form of a trade discount received by the appellant from the supplier of vehicles." 9.5 As regards the demand of service tax under Business Auxiliary Service on the amount received on account of colour difference charges of vehicles is concerned, we find that such charges are in relation to sale of car and is related to the value of car sold and not a consideration for any service, let al....