TaxTMI 
TaxTMI 
2024 (12) TMI 676
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.... against the appellant under section 73(1) of the Finance Act, 1994 along with interest besides imposition of penalty under sections 77, 78 and 78A of the Act ibid. 3. The facts of the case are that the appellant is an authorized dealer of M/s. Honda Cars (I) Ltd. (HCIL). The DGCEI during the year initiated certain investigations regarding consumer specific schemes (incentive/discount schemes) floated and implemented by HCIL for the purpose of levy of service tax for the period 01.10.2012 to 30.06.2017. It was observed by the investigating agency that during the aforesaid period the appellant had received monetary considerations for providing services through credit notes and had made adjustments of accounts during the relevant point in time. The credit notes so received by the appellant were credited to their purchase account and were netted out in the said accounts resulting in reflection of only net portion of such income under the category of "other income" in the balance sheet. 4. Show cause notice dated 27.08.2018 was therefore issued to the appellant and the was adjudicated vide Order-in-Original referred to supra. 5. Shri Sameer Sood, Ld.Advocate submitted that HCIL is e....
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....ppellant, Shri Anand Narayan, Ld.AR for the department however reiterates the Commissioner(Appeals') findings and emphasizes the fact that the demand pertains to post-negative list regime, that the appellants were promoting and selling cars and other products manufactured by HCIL, achieving targets and in return were granted discounts/incentives offered by HCIL. He however does not dispute the fact that the discount/incentive offered by the manufacturer which were passed on to the buyer, through the appellant, were in relation to sale and purchase of the said goods and were in accordance with the agreement formulated by HCIL from time to time and the guidelines and marketing strategies required to be adhered to by the dealers for enhancement of sales and other related operations. It is also not disputed that the dealer (appellant) is mandatorily required to comply with and implement HCIL's policies as communicated by the latter from time to time and in accordance with the agreements entered. In sum and substance the Ld.AR contends that the said activities are not covered under the negative list under section 66D of the Finance Act, 1994. As there was no specific exemption thereto, ....
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.... section 66B(44) and 66B of the Finance Act, 1994. 11. We also take note of the conclusions drawn by the learned adjudicating authority in an attempt to distinguish this Tribunal's decision, in the appellant's own case. However, we are not quite convinced with the learned adjudicating authority's point of view. For records, the said para from the order-in-original is enumerated below: 5.5 One of the contention of the appellant is that they are engaged in trading of sale of goods, which has been settled in their favour in its own case Hon'ble CESTAT Allahabad final Order No.ST/A/70756/2016-CU dated 30.06.2016 in Appeal No.ST/1606/2011-CU[DB]. It is seen that this case was regarding demand of service tax on value of part and accessories sold during servicing of vehicles. It was held by the Hon'ble Tribunal that value of part and accessories sold during servicing of vehicles when separately shown in the invoices and such value representing sale of goods was exempted from levy of Service Tax through Notification No.12/2003-ST dated 20.06.2003. The said case thus affords no relief to the Appellant in this impugned issue. 12. The fact that the appellants are engaged in sales of cars ....
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.... evident that the aforesaid activities as imputed in the show cause notice are characteristically out of the scope of Chapter V of the Finance Act, 1994. The departmental authorities below have in fact admitted to the said position vide Paras 73, 74, 77 and 80 of the Order-in-Original and para 5.4 of the Order-in-Appeal. It is not disputed that the amount reimbursed by virtue of credit notes actually relates to target incentives and discounts offered by HCIL passed on to the customers through the appellant related to its business of sale of cars, spare parts and accessories and not on account of rendition of any service. It therefore belies logic to include the said activity relating to sale of goods within the ambit of section 66B of the act ibid. We are thus of the view that the provisions of the Finance Act cannot be made applicable to such transactions between the appellant and the HCIL and between the appellant and/or its customers. The discounts and incentives are offered by the manufacturer in relation to sale and purchase of the goods passed on to the ultimate consumers while transferring the possession and ownership of the goods. 14. Drawing analogies, the appellant in su....