TaxTMI 
TaxTMI 
2024 (8) TMI 206
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....e of consideration for the service. During the investigation, the documents as that of returns for Financial Year 2014-15 to 2017-18, the balance sheets for the said year, ledger accounts of all types of income receipts, other than the income against sale of vehicle, spare parts, accessories, components etc. on which VAT/CST has been paid, agreements and correspondence if any, were called from the appellant and the statement of appellants' authorized person was also recorded. From these documents department observed that the manufacturer and dealer entered into a contractual obligation to be performed in terms of the dealership agreement entered into between them and in terms of the circulars issued by the manufacturer from time to time. Thus, the discount/incentive/commission in the following form were being earned by the appellants from M/s. TML: (i) Discount received for vehicle and parts from TML. (ii) Incentive received for Target Achievement from TML. (iii) Discount/Incentive received for TATA Business Support from TML. (iv) Discount/Incentive received from AMC from TML. (v) Commission received for insurance from TML. (vi)....
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....was part and parcel of the agreement of sale and purchase as entered between them. It is leviable to VAT and not to the service tax. No separate activity as such can be indentified in given which can be called as service. Thus, the amount received is nothing but a trade discount which is prevalent in the market. The findings in the order under challenge are alleged to be assumptive in nature. The amount received cannot be called as consideration defined under Section 67 of the Finance Act, 1984 (the Act). The adjudicating authority without indentifying the activity has wrongly linked the discount of sale price as consideration for a fictitious activity. The assumption of consideration is also alleged bogus. 3.1 Learned Chartered Accountant also pointed out that in Para 6.4 (v) of the impugned order, the authority has self admitted that given receipt of discount cannot be classified under Section 66E(e) of the Act, confirmation of the impugned demand is contrary to the said findings. It is finally submitted that show cause notice is bad in law, it being barred by limitation. There is nothing on record to show suppression on part of the appellant with an intent to evade payment of....
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....Dealer" to sell the following Commercial Vehicles including their variants (hereinafter referred to as "Vehicles"), spare parts and accessories thereof marketed by the Company (hereinafter referred to as "Spare Parts") [the expression "Vehicles" and "Spare Parts" are hereafter collectively referred to as "Product"] and to provide After Sales Services and various Value Added Services to the customers (hereinafter collectively referred to as "Services") Clause C sub-clause (h) reads as follows: "3(h) This agreement has been entered into and executed by the parties on a Principal-to-Principal basis and is a contract for sale of products and services by the Company to the dealer and resale thereof by the dealer mentioned above. There is no express or implied relationship of employer and employee between Dealer's employees/personnel/representatives and the Company. The Dealer, its employees, agents and representatives shall resale products and provide Services as independent entity and nothing contained herein shall be deemed to create any partnership, joint venture between the Parties or a merger of their assets or their fiscal or other liabilities or undertakings or create....
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....which are extended to the appellant for achieving the required targets. The relevant paragraph of the decision is as follows: "14. In respect of the incentive on account of sales/target incentive on sale of vehicles and incentive on sale of space parts for promoting and marketing the products of MUL, the contention is that these incentives are in the form of trade discount. The assessee respondent is the authorized dealer of car manufactured by MUL and are getting certain incentives in respect of sale target set out by the manufacturer. These targets are as per the circular issued by MUL. Hence these cannot be treated as business auxiliary service. 18. In respect of sales/target incentive, the Revenue wants to tax this activity under the category of business auxiliary service, We have gone through the circular issued by MUL which provides certain incentives in respect of cars sold by the assessee-respondent. These incentives are in the form of trade discount. In these circumstances, we find no infirmity in the adjudication order whereby the adjudicating authority dropped the demand. Hence, the appeal filed by the Revenue has no merit. 5.5 This Tribunal in its r....