TaxTMI 
TaxTMI 
2025 (4) TMI 821
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2003 to 31.03.2008 the appellant had received an amount of Rs.1,63,82,965 as warranty charges reimbursed from vehicle manufacturers which were liable to service tax under the category authorised service station services. The appellant had also received certain offtake incentives from vehicle manufacturers for causing promotion and sale of vehicles manufactured by them. Incentives were also received various schemes, from insurance companies for causing promotion/marketing or services of the insurance companies and commissions from banks/financial institutions for promoting their business. All these incentives received by the appellant were held to be liable to pay service tax classifying the same under Business Auxiliary Services. Demands were also raised under Accident repair services, Renting of Immovable Property Services. Cenvat credit on certain input services was also denied. Accordingly, the Commissioner in the impugned order confirmed the service tax amount of Rs.46,52,790/- including with the Education and Higher Education Cess and imposed penalty under Section 76,77 and 78 of the Finance Act 1994. 3. The Learned Counsel on behalf of the appellant Submitted that the war....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion of any motor car, light motor vehicle, or two wheeled motor vehicles manufactured by such manufacturer'. "Section 105 (zo) defined a taxable service in relation to authorized service station as service means 'any services provided or to be provided to a customer, by any authorized service station in relation to any service, repair, reconditioning or restoration of motor cars, light motor vehicles or two wheeled motor vehicles in any manner'. The amended version reads as 'to any person, by any authorized service station in relation to any service, repair, reconditioning or restoration of motor cars, light motor vehicles or two wheeled motor vehicles in any manner'" 5.1 The first issue is with regard to payment of service tax on Authorized Service Station Services. During the period from 01.10.2003 to 31.03.2008, the appellant had received an amount of Rs.1,63,82,965/- (Annexure I-V, XVI of the SCN) as warranty labour reimbursement from vehicle manufacturers namely M/S. Hindustan Motors, M/S. Eicher Motors and Honda motors and it is the claim of the appellant that since the warranty reimbursements are from the vehicle manufacturers and not from the vehicle owners, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of service tax Rs. 5,78,742/- on reimbursement of cost of defective parts replaced during the warranty period cannot be sustained". 5.2 The second issue is with regard to Accident Repair Services (Annexure XIII -XIV of the SCN), details as shown below. In this regard the appellant has stated that maintenance and repair service has come under Service Tax Net only from 2005 onwards and hence not liable to pay tax. The Commissioner in the impugned order states that 'a perusal of the agreement entered into with the buyers of the vehicles indicates that such services are rightly classifiable under repair service'. It is also admitted that the Marikkar Accident Restoration Service (MARS) is nothing but repair of vehicle beyond the warranty period. As seen from the annexures of the show-cause notice reproduced below the demand is only on the differential tax to be paid on the value declared in their annual returns as against the value declared in their ST3 returns. The Commissioner in the impugned order has clearly held that during the years 2004-05 and 2005-06 the appellant had declared a taxable service value has Rs.88,02,510/- and Rs.96,31,149/- respectively as against the amount....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e appellant and this activity is a clear case of promotion of service rendered by the clients i.e. financial institutions, which is specifically included in the category of BAS specified under Finance Act, 1994 and are liable to service tax w.e.f. 1-7-2003. Such promotion of the business of financial help promote the business of the appellant also and does not alter the character of BAS. Further we find that the decisions relied upon by the appellants are not squarely applicable to the facts and circumstances of the present case as in the present case the appellants are receiving commission and not the rental charges whereas the decision relied upon by the learned AR in the case of Ved Automotives and Arpanna Automotive Pvt. Ltd. are squarely applicable in the present case. because in both the decisions, it is the commission which was received by the appellants and the Division Bench of this Tribunal has held them as falling under the category of BAS. Therefore, by following the ratios of the said two decisions, we are of the considered opinion that the appellants are liable to pay the service tax under the category of BAS". In view of the above, the commission received by the appe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....: "35. From this analysis, it is clear that we have to understand as to whether renting of immovable property for use in the course or furtherance of business or commerce by itself is a service. There is no dispute that any service connected with the renting of such immovable property would fall within the ambit of Section 65(105)(zzzz) and would be exigible to service tax. The question is whether renting of such immovable property by itself constitutes a service and, thereby, a taxable service. We have already seen that service tax is a value added tax. It is a tax on the value addition provided by some service provider. Insofar as renting of immovable property for use in the course or furtherance of business or commerce is concerned, we are unable to discern any value addition. Consequently, the renting of immovable property for use in the course or furtherance of business of commerce by itself does not entail any value addition and, therefore, cannot be regarded as a service. Of course, if there is some other service, such as air conditioning service provided along with the renting of immovable property, then it would fall within Section 65(105)(zzzz). 36. In v....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e then was) in the case of All India Federation of Tax Practitioners and Others v. Union of India and Others, (2007) 7 SCC 527 = 2007 (7) S.T.R. 625 (S.C.). 10. In the present case, we are clearly of the view that the nature of the transaction made by the petitioner with its tenant clearly amounts to renting of an immovable property for the purpose of business or commerce and is, therefore, clearly covered by Section 65(90-a) of the Finance Act, 1994 and "service tax" is clearly leviable thereon. Although challenge in the present case has been made to the Amendment Act of 2010 to Section 66(105)(zzzz), we find no justification to entertain the present writ application since we are also of the view that the amendment is clearly clarificatory in nature and Parliament certainly possesses the necessary legislative competence to declare the said amendment to be retrospective in operation and, therefore, we do not find any error or lack of competence in such legislation." 6. In view of the above and taking into consideration the retrospective amendment, we find that the demand is justified. Since the demand is for the normal period, the same is confirmed. 7. Based on the a....