TaxTMI 
TaxTMI 
2024 (4) TMI 432
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.....04.2002 to 30.06.2007 1,14,192/- Rs.500/- u/s 77 Rs.1,14,192/- u/s 78 ST/3931/2012 Order-in-Appeal No. 243/CE/Appl/Ldh/2012 dated 28.09.2012 17.10.2007 2004-05 to 2006-07 2,74,965/- Rs.500/- u/s 77 Rs.2,74,965/- u/s 78 ST/55535/2013 Order-in-Original No. 35/Ldh/2012 dated 01.11.2012 16.09.2011 01.04.2006 to 31.03.2011 59,59,499/- Rs. 200/- per day or @2% during which failure to pay ST for the period 1.4.06 to10.5.08 u/s 76 Rs.10,000/- u/s 77 Rs.59,59,499/- u/s 78 2.1 Briefly stated facts of the present case are that the appellant is authorized Maruti dealer and is engaged in sale of Maruti vehicles. In addition to the sale of Maruti vehicles, the appellant has also provided the services inter alia: (i) Assisted their customer in arranging finance from banks with whom Maruti Udyog Ltd (hereafter in short as 'MUL') entered into an agreement. The bank paid commission to MUL for said activity. MUL after keeping some amount, part with the rest amount to the appellant. The appellant cannot arrange finance from banks other than approved by MUL. (ii) Made DGS&D sale to Central Stores Depot (in short CSD) on the instruction of ....
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....ax thereon and the demand of service tax by the Authorities Below second time, does not sustain. In support of his submission, he relies on the decision of the Tribunal in the case of CST, Mumbai-I vs. Sai Service Station Ltd - 2014 (35) STR 625 (Tri. Mumbai) and on the decision of Hon'ble Supreme Court in the case of Sai Service Pvt Ltd vs. CST - 2017 (7) GSTL J38 (SC). 4.4 He further submits that the appellant did not pay any service tax on the extended warranty on the belief that the same are not payable, being service tax not payable on warranty services. 4.5 He also submits that the impugned services are not classifiable under Section 65(19)(ii) as it relates to services provided by client and further, the appellant has not received the commission from the bank. He further submits that even if it is accepted for the sake of arguments that the bank paid the commission to the MUL and not to the appellant and accordingly the tax, if any, is to be paid by MUL. The appellant was never the client of the bank. 4.6 He further submits that MUL vide mail dated 17.05.2004 clarified that dealers are not required to pay service tax on Maruti Finance Payouts as MUL has deposited th....
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....as no mens rea or mala fide intention to evade service tax and therefore, imposition of penalty is not justified. More so when, there was reasonable cause for non-payment of service tax. 4.10 Further, he submits that the question imposition of penalty does not arise because the demand of service tax itself is not sustainable. 5. On the other hand, the learned AR for the Revenue reiterated the findings of the impugned order. 6. We have carefully considered the submissions made by both the parties and have gone through the material on record and also the judgments cited by both the sides. We find that the only issue to be decided in all the three appeals is whether the incentives being received by the appellant amounts to receipt of payment for providing the taxable service in relation to promotion or marketing or sale of goods, produced or provided by MUL and chargeable to service tax under 'Business Auxiliary Service'. 7. Before we examine the demand of service tax under the category of 'Business Auxiliary Service', it is relevant to reproduce the definitions of 'Business Auxiliary Service' as provided under Section 65(19) from time to time during the relevant period an....
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....relation to operation of computer systems. Definition of 'Business Auxiliary Service' amended w.e.f. 16.06.2005 - "Business Auxiliary Service" means any service in relation to, (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service provided by the client or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client: or Explanation - For the removal of doubts, it is hereby declared that for the purposes of this sub-clause, "inputs" means all goods or services intended for use by the client; (v) production or processing of goods for, or on behalf of, the client; (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management ....
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....is squarely covered by the decision of the Tribunal in the case of CST, Mumbai-I vs. Sai Service Station Ltd (cited supra), which was upheld by the Hon'ble Supreme Court as reported in2017 (7) GSTL J38 (SC). 10. In view of the fact that the activities of the appellant do not fall within the definition of 'Business Auxiliary Service', we hold that the demand of service tax under the category of 'Business Auxiliary Service' is not sustainable in law and therefore, we set aside the same. 11. As regards invocation of extended period, we find that demand has been raised on the basis of audit conducted by the Department without further investigation. Further, we find that in Appeal No. ST/3930/2012, the period involved is 01.04.2002 to 30.06.2007 and in Appeal No. ST/3931/2012, the period involved is 2004-05 to 2006-07 whereas the show cause notice was issued on 17.12.2007. In Appeal No. ST/55535/2013, the period involved is 01.04.2006 to 31.03.2011 and the show cause notice was issued on 16.09.2011. We also find that the appellant has not suppressed any fact relating to the activities carried out by the appellant and also, has been regularly filing ST-3 Returns and was subject to ....