TaxTMI 
TaxTMI 
2025 (5) TMI 1369
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....cate for the appellant Shri Shashank Yadav, Authorised Representative for the respondent ORDER BINU TAMTA : 1. Challenge in the present appeal is to the impugned Order Order-in-Original No.JAI-EXCUS-000-COM-30-19-20 dated 25/26.09.2019 confirming the demand of service tax amounting to Rs.4,17,65,118/- under Section 73(2) of the Finance Act, 1994 Finance Act, 1994 read with Section 174 of the CGST Act, 2017 Act, 2017 along with interest and penalty of equivalent amount and further imposing penalty of Rs.10,000/- under Section 71(1) of the Act read with Section 174 of the Act, 2017 and penalty of Rs.1,00,000/- on Shri Bhaskar Joshi, Manager (Accounts) and Authorised Signatory under Section 78A of the Act. 2. The appellant is an....
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....ppeals have been filed before this Tribunal. 5. Having heard both the sides and on perusal of the records, we find that the issue which arises for our consideration is whether service tax is leviable on incentives/discount, reimbursement extended by MSIL to the appellant. 6. The issue is no longer res integra and as referred to by the Learned Counsel for the appellant the same has been considered and decided in favour of the assessee in the following cases : (i) Rohan Motors Limited v. Commissioner of Central Excise [2021 (45) G.S.T.L. 315 (Tri. - Del.) = [2020] 122 taxmann.com 24 (New Delhi - CESTAT) (ii) T.V. Sundram Iyengar & Sons Pvt. Ltd. v. Commissioner of CGST & C. Ex.....
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....n between the dealer and the end customers are purely on principal to principal basis. The vehicle manufacturer M/s. Maruti Suzuki India Ltd. on the basis of yearly performance of sale grants the discount to the dealer, this discount is nothing but a discount in the sale value of the vehicle sold throughout the year therefore these sales discount in the course of transaction of sale and purchase of the vehicles hence, the same cannot be considered as service for levy of service tax." 8. The Larger Bench of this Tribunal in the case of Kafila Hospitality and Travels Pvt. Ltd. (supra) dealt with the issue whether service tax can be levied under the category of "Business Auxiliary Service" on target based incentives paid to the travel agent....
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....uld not qualify as consideration as the incentives would be in relation to all supplies and not in relation to a particular supply. The relevant portion of the decision of the Federal Court is reproduced below :- 53. On analysis, the so-called supplies for consideration identified by the Commissioner are nothing more than the encouragement of an overall business relationship between the manufacturer and the dealer to the mutual benefit of both. The relationship involves a whole raft of obligation from one to the other all, presumably, with the ultimate objective of maximizing their respective commercial positions. As the A.P. Group put it, the overall relationship contemplates a continuing dialogue between wholesaler and retailer i....
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....find that the present case is squarely covered by the law laid down in those judgments. We have examined the dealership agreement entered between MSIL and the appellant and we find that MSIL is engaged in manufacturing, marketing and selling of motor vehicles and the appellant purchases the vehicles from the manufacturer as their authorised dealer. The relationship between the appellant and MSIL is only of buyer and seller and sale-purchase have taken place on principal to principal basis. 10. We also find that the activity undertaken by the appellant is for the sale and purchase of the vehicle and the incentives are in the nature of trade discounts. The incentives, therefore form part of the sale price of the vehicles and have no correl....