TaxTMI 
TaxTMI 
2024 (10) TMI 901
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....pply of vehicles upon respective TML, are informed about the on-going incentives/discount schemes such as special incentive, discount scheme, target scheme, additional scheme, sales target incentive etc. where under the Appellants upon stratifying the eligibility criterion for the on-going schemes used to received additional discounts/incentives on post-sales basis from TML. The aforesaid incentives being in nature of "trade discounts/ incentives" were offered post the sales of vehicle by TML, the Appellants used to record the same in a separate account named as "Trade discounts & Incentives". 1.2 During the course of EA-2000 Audit conducted by the department, the records of the Appellants for the relevant period were scrutinized and it was pointed out that Appellants have received certain amounts under different schemes form TML, which are exigible to the levy of service tax. However, no service tax has been discharged by the Appellants on the said income. 1.3 As a direct outcome of the aforesaid audit, a show cause notice was issued to the Appellants alleging that with effect from 01.07.2012 every activity for a consideration by any period for another shall be liable ....
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.... Appellant in terms of its dealership agreement. Basis this, the Adjudicating Authority has confirmed the demand of service tax in respect of all incentives/reimbursements received by the Appellant from TML during the relevant period. At the outset, it is submitted that though commercially, the amounts received by the Appellant are termed as "incentives", all such amounts are extended by TML by way of price reduction against the supplies made by it to the Appellant. In other words, the incentives, which are received by the Appellant, are actually discounts in purchase price, extended vide credit notes issued by TML, by way of various schemes on the products purchased by the Appellant from TML. 2.1 On perusal of the relevant terms of the dealership agreement between, the following facts emerge - a) That the Appellant and TML are working on "Principal to Principal" basis and the Appellant does not act "for or on behalf of" TML. b) That the Appellant is buying "Products", viz., Vehicles, Spare Parts, Accessories from TML for further sale to its own customers. c) That the Appellant shall advertise and/or promote Products & Services orfacilities in a manner....
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....rson to another and collected in such manner as may be prescribed." Thus, under the new regime, Service Tax is leviable on value of all services except for the services specified in the negative list. 2.5 Section 65B (44) of the Finance Act defines the term "service" to mean any activity carried out by one person for another for consideration, including a declared service. Section 65B (44) is extracted hereunder for ready reference: "65B (44) - "service" means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include: (a) an activity which constitutes merely; (i) a transfer of title in goods or immovable property, by way of sale, gift orin any other manner; or (ii) such transfer, delivery or supply of any goods which is deemed to be a sale within the meaning of clause (29A) of Article 366 of the Constitution; (iii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the timebeing....
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....judgments of the Tribunal, it is submitted that unless it is established by the Department that the Appellant possessed any mala fide intention to evade tax liability, the presumption would be in the favour of the Appellant that there is absence of any mala fide intent and that the ingredients of fraud, willful misstatement and suppression of facts is not present in the Appellant"s case. However, the Department has failed to even make proper allegations to substantiate their case against the Appellant regarding presence of any malafides. Therefore, on this account, the extended period of limitation cannot be invoked. He also placed reliance on the following judgments:- * Government of India vs. Madras Rubber Factory Ltd., 1995 (77) E.L.T. 433 (SC) * Union of India & Others vs. Bombay Tyres International Pvt. Ltd., 1984 (17) E.L.T. 329 (S.C.) * M/s Addison & Co. Ltd. vs. CCE, (1977) 5 SCC 763, * DCCT, Corporate Division vs. M.R.F. Ltd, [2008] 14 VST 124 (WBTT) * Godavari Fertilizers and Chemicals Ltd. vs. Commissioner of Commercial Taxes, (2004) 138 STC 133 * M/s Philips India Ltd vs. Collector of Central Excise, Pune, 1997 (91) ....
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....d Motors Agency Ltd v CC, Lucknow 2022 (2) TMI 546-CESTAT ALLAHABAD * Joshi Auto Zone Pvt. Ltd. v. CST, Chandigarh 2023 (12) TMI 1069-CESTAT CHANDIGARH * Syniverse Mobile Solutions Pvt. Ltd. v. CC, CE & ST, Hyderabad-IV 2023 (6) TMI 463-CESTAT HYDERABAD * CCE, Goa v. Swapnil Asnodkar 2018 (1) TMI 266 - CESTAT MUMBAI 3. Shri Rajesh R Kurup, Learned Superintendent (AR) appearing on behalf of the Revenue, reiterates the findings of the impugned order. 4. We have carefully considered the submissions made by both the sides and perused the records. We find that the Revenue has demanded the service tax on the trade discount given by M/s. TATA Motors Limited to its buyer i.e. the appellant. This transaction is purely a sale purchase transaction. The appellant have not provided any service against the amount of trade discount. The trade discount is deducted from the sale value of the goods. Therefore, the entire transaction between the appellant and M/s. TATA Motors Ltd is purchase and sale of the cars. This Tribunal time and again clearly held that since the discount/ incentive given by the car manufacturer to its dealer in the course of the sale of t....
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....ive given by the seller of vehicle M/s. Toyota Kirloskar Motors Pvt Ltd. to the appellant being a purchaser of the vehicle what it is necessary to know the nature of transaction. As per the facts available on record, it is clear that the appellant purchased the vehicles from M/s. Toyota Kirloskar Motors Pvt Ltd. on principal to principal basis and in turn the said vehicles were sold by the appellant to their customers on principle to principle basis, at both the stages from M/s Toyota Kirloskar Motors Pvt Ltd. to the appellant and from the appellant to the customers, the transaction is clearly of purchase and sell of the vehicles. To ascertain that the transactions are of purchase and sale, the sample invoice from M/s Toyota Kirloskar Motors Pvt Ltd. to appellant and corresponding invoice from appellant to the ultimate customer are scanned below: * Purchased invoice in respect of vehicles sold by M/s. Toyota Kirloskar Motors Pvt. Ltd. to the appellant M/s. Infinium Motors Guj Pvt Ltd : * Invoice for sale of above vehicles by the appellant M/s Infinium Motors Pvt Ltd to their customers: From the above invoices, it is clear that transaction between M/s. Toy....
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....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." * CST, Mumbai V/s. Jaybharat Automobiles Ltd.- 2016 (41) STR 311 (Tri.-Mumbai) "6.5 On the appeal by Revenue on the issue of incentives received by the appellant from the car dealer, we find that the relationship between the appellant and the dealer is on a principal to principal basis. Only because some incentives/discounts are received by the appellant under various schemes of the manufacturer cannot lead to the conclusion that the incentive is received for promotion and marketing of goods. It is not material under what head the incentives are shown in the Ledgers, what is relevant is the nature of the transaction which is of sale. All manufacturers provide discount schemes to dealers. Suc....
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....ly at arms length hence sale transaction on principal to principal basis. From the invoice, it is also observed that a trade discount was passed on by the manufacturer to the appellant. As per this undisputed fact once, the transaction is of sale there is no relationship of service provider and service recipient between the manufacturer and the buyer (the present appellant). Accordingly, the discount passed on by the manufacturer to the appellant cannot be construed as a commission and the same is not the subject matter of levy of service tax. It is further seen that the appellant also, after purchase of goods from the manufacturer further sold to various traders. A copy of the sale invoice issued by the appellant is scanned below : From the above invoice it can be seen that it is clearly a sale invoice under which the appellant also paid the VAT. This shows that the transaction from the manufacturer to the appellant and subsequent from appellant to the individual traders are clearly sale transactions. Hence no service is involved. As per the above facts, we are of the clear view that a trading margin cannot be subject matter of levy of service tax. Accordingly, the impugn....
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....ted service is effective only from 01.04.2011. Hence, the demand under Rule 6(3) on trading activity for the period 2007-08 to 2010-11 is wholly illegal and without any support of law. This very issue has been considered by this Tribunal in the following judgments: * CCE, Bhopal V/s. My Car (Bhopal) P. Ltd.- 2019 (22) GSTL 273 (Tri.- Del.) "The present appeal is filed by the Department against Order-in-Appeal No. 34/BPL/2013, dated 5-2-2013. 2. The brief facts of the case are that the appellant during the period under consideration (2010-2011) was providing the services and availing the Cenvat credit on the various services like telephone, advertisement, renting, insurance, banking, maintenance and repair, courier, security and other financial services under the provision of Cenvat Credit Rules. They were availing the Cenvat credit on all these input services. From the premises, where they are providing the taxable service, they were also carrying out the sale of cars, which was liable for Service Tax. The Department was of the view that since the respondent did not maintain separate accounts for the input services used towards the taxable activity as wel....
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....idered as having any retrospective effect. Therefore, we find no reason to interfere with the impugned order. The appeal is accordingly dismissed." * Marudhan Motors V/s. CCE, Jaipur-ll - 2017 (47) STR 261 (Tri.-Del.) "The issue involved in this appeal for consideration by the Tribunal, is as to whether, during the period 2005-2006 to 2009-2010, trading should be considered as "exempted service" under Rule 2(e) of the Cenvat Credit Rules, 2004 for the purpose of requirement of Rule 6(3) ibid. 2. The brief facts of the case are that the appellant is a service tax assessee and provides the taxable service namely, authorized services station, business auxiliary service and tour operator service. Apart from providing the taxable services, the appellant also engaged in the trading activities. Since Cenvat credit taken on common input services were used for providing both taxable service as well as for the services relating to the trading activity, the Department disallowed the Cenvat credit under Rule 14 of the Rules on the ground that trading activity should be considered as exempted service in terms of Rule 2(e) of the Rules, and as such, the appellant is re....
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....ric and Glass on which they did not avail Cenvat credit and sold them and it appeared to Revenue that such activity was trading and therefore since Cenvat credit of Service Tax paid on inputs services had gone into activity of manufacturer as well as abovestated trading, there was demand of amount of Rs. 2,12,569/- under Rule 6(3) of Cenvat Credit Rules, 2004. The appellant-manufacturer contended that trading was treated as exempted service through Notification No. 3/2011 C.E. (N.T.), dated 1-3-2011 w.e.f. 1-4-2011 and therefore the said provision was not applicable to said transactions. The Original Authority decided the issue through OIO dated 10-10-2013 through which the demand was confirmed and equal penalty was imposed. The appellant-manufacturer preferred appeal before Commissioner (Appeals). The appeal was decided through impugned Order-in-Appeal dated 28-4-2014 wherein the learned Commissioner (Appeals) has held that the said Notification No. 3/2011 declaring trading as service was clarificatory in nature and that is why the learned Commissioner (Appeals) have directed to modify the Order-in- Original dated 10-10-2013 to the extent that demand confirmed shall be re-calculat....
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....OMPP3383P PANIT No SI Description of Goods Nu. Quantity Rate De Amount INNOVA 1 TOYOTA INNOVA G MODEL SUFFIXIQ % 12,82,925.42 MBJ11JY4007499003 Vat Tax Payable 12.5% ADDITIONAL TAX 2.5% 234 12.50 1,60,365.68 32,073.14 Round Off Low: (10.24 MBJ11JY4007499003 Vat Tax Payable 12.5% ADDITIONAL TAX 2.5% 234 234 Round Off Low: Rs. 14,75364.00 E&0.E Amcurt Charprable (In worto) INR Fourteen Lakh Seventy Five Thousand Three Hundred Sixty Four Orty Reesaris: 113096845,ORD130001250JNV150001213,20-JUN-13. IMYJQ.2KD U298013,MBJ11JV4007409033-0513. GJJW11301844,HDFC BANK LTD MOTOR for INFINIUM MOTORS PVT LTD FY 131 We dedare that this invoice shows the actual price of the goods described and that all particulars are true and correct. This is a Computer Generated Invoice Document 3 INVOICE INFINIUM MOTORS PVT LTD FY 13-14 842 NR YMCA CLUB SG HIGHWAY POST JIVRAJ PARK AHMEDABAD-51 E-Mail : accounts@infiniumtoyota in Invoice Na INV130001306 Dad 29-Jun-2013 Delivery Note Mode Tens of Payment Suppliers Ret MBJ11JV4007407664 Other Reference(s) Buyer's Order No. Daled Delivery Note Dain Despatched through Destinatio....