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2026 (4) TMI 1661
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....The appellant was paying Service Tax on the services which are taxable and filing ST 3 Returns. They have discharged the Service Tax liability for FY 201415 Rs.17,29,058 and for FY 2015-16 Rs. 19,40,398 which is as per the ST-3 Returns. On the ground that the appellant has shown higher turnover in the IT Returns and has not paid the Service Tax on the Commission received from Volkswagon, the SCN C. No. V(15)01/SCN/ST/SM Autokraft/GHY/2017/950 dated 24.02.2017 was issued for the period February 2012 to March 2014, demanding 16,16,905. The extended provisions were invoked while issuing this SCN. After due process, the lower authorities confirmed the demand along with interest and penalty. Thereafter, one more SCN C. No. V(15) 474/GHY/DIV-II/HQAE-II/SM/SCN/2019-20/3755 dated 22.10.2019 was issued for the period 2014-15 to 2015-16, demanding Rs. 17,90,886. For issuing this SCN, once again the extended period provisions were invoked. Even this demand came to be confirmed by the lower authorities. Being aggrieved by the impugned OIAs, the appellant has filed the present appeals before the Tribunal. 2. Since the issue in both the Appeals are common, we have taken up both the appeals to....
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....f the cars and cannot be treated as 'Commission', falling under the category of Business Auxiliary Service for demanding the Service Tax. 7. The appellant relies on the following case laws, on identical / similar issue : (a) Toyota Lakozy Auto Pvt Ltd Vs CSTCEX Mumbai 2017(52) str 299 (Tri Mum) (b)Prem Motors Pvt Ltd Vs CCE - Jaipur 2023(73) GSTL 97 (Tri-Del) (c) Bimal Auto Agency Vs CCGST Dibrugarh 2023 (10) Centax 55 (Tri-Cal) 8. In view of the above submissions, it is prayed that the appeal may be allowed on merits. 9. The Ld Counsel further takes the stand of time bar in respect of both the SCNs. The first SCN was issued on 24.02.2017 for the period February 2012 to March 2014 and the second SCN was issued on 22.10.2019 for the period 2014-15 to 2015-16. In both the cases, the extended period provisions have been invoked. It is submitted that the appellant is duly registered with the Department and has been paying the Service Tax on Repairs and Maintenance Services and filing ST 3 Returns. Similarly they have been filing all their Income Tax Returns, showing the full turnover in their P & L Accounts and Balance Sheets. Therefore, the appellan....
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....d. They also get reimbursed for the additional discounts and incentives offered to the customers while buying the cars. These issues have come up before the Tribunals on various occasions. We have gone through some of the decisions, which are discussed below : Prem Motors Pvt Ltd Vs CCE - Jaipur 2023(73) GSTL 97 (Tri-Del) 8. The issue which arises for our consideration is whether service tax is leviable on incentives/discount, reimbursement extended by MSIL to the appellant. 9. 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) 315 (TriDel.)/[2020] 122 taxmann.com 24 (New Delhi - CESTAT) (ii) TV Sundram Iyengar & Sons (P.) Ltd. v. Commissioner of CGST & C.EX. Madurai 2021 (55) 144 (Mad.) (iii) B M Autolink v. Commissioner of Central Excise 2022-VIL-900-CESTAT-AHM-ST (iv) Roshan Motors (P.) Ltd. v. Commissioner of Central Excise 2022-VIL-654CESTAT-DEL-ST (v) Anand Motor Agencies Limited v. Commissioner of Custom....
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....f incentives and discounts cannot be treated as consideration for any service and therefore no Service Tax is leviable there Bimal Auto Agency Vs CCGST Dibrugarh 2023 (10) Centax 55 (Tri-Cal) 4. As regards the demand of service tax of Rs. 3,86,36,400/- it is the allegation of the department that the Appellant had received incentives from MSIL as per terms and conditions of the Agreement and since they were acting on principal to principal basis, the Appellant was liable to pay service tax on such incentives received. On the other hand, it is the contention of the Appellant that such incentives are in the nature of trading income as the same arises out of sales of vehicles made by the Appellant and there is no element of service to attract service tax on the same. The Appellant also submitted that as per Para 35 of the Dealership Agreement between MSIL and the Appellant, it is mandatory for the dealer viz. the Appellant to promote sales of the MSIL vehicles. Further, MSIL also provides various discounts to the Appellant based on their purchases from MSIL, overall performance and customer satisfaction etc. Further, MSIL provides compensation to the Appellant on acco....
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....f service tax of Rs. 3,86,36,400/ cannot survive and we accordingly set aside the same. 17. From the above case laws, we find that the issue is well settled in favour of the dealers in respect of the discounts and incentives. Therefore, considering the factual details and applying the ratio of the cited case laws, we set aside the impugned orders and allow the appeals on merits. 18. Now we take up the issue of time-bar issue raised by the appellant. Admittedly, the appellants are registered with proper Service Tax Registration and have been paying the Service Tax on the taxable services and were filing the ST 3 Returns. In the first SCN, at Para 2 it is stated that the Audit Officers of the Commissionerate Hqrtrs audited the unit on 08.07.2014 for the period February 2012 to March 2014 and have found that the appellants have received 'commission' of Rs.1,30,81,756 on which as per the Audit Rs.16,16, 905 is payable as Service Tax. The Revenue has not brought out any explanation as to what made them wait for further two and half years to issue the SCN on 24.02.2017 demanding the exact Service Tax of Rs.16,16,905. There is nothing to indicate that any further investigation / ver....
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....ocuments sought for and has also intimated that their operations are closed from 31.03.2016. In spite of these documents being available with the Revenue, we do not see as to why the next communication was sent on 29.07.2019, i.e., after about more than 3 years, knowing fully well the unit is closed and no further documents may be brought in by the appellant. The surrender of S T 2 and filing of ST 3 Returns are very much available within the website of the Revenue. Therefore, even seeking of these documents in July 2019, is clearly seen an effort to justify the delay in issuing the SCN. The Range / Division was very much aware of the activities of the appellant and that the Audit was conducted in 2014 and the issue was raised for the period February 2012 to March 2014. The first SCN was issued on 24.02.2017. But still no action was taken to call for the details for the subsequent period, even as the appellant was filing their normal ST 3 Returns. Therefore, even in the proceedings under the second SCN, we do not find any case of suppression has been made out against the appellant. 21. We also find that the Hon'ble Supreme Court in the case of NIZAM SUGAR FACTORY Versus COLLECTO....
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....he purchasers of vehicles of the Volkswagen Group. ForAXIS BANK LTD. 7 In order to achieve this goal, cooperation in a spirit of partnership is called for between the companies of the Volkswagen Group and the Dealer. In India, "Volkswagen Group" (herdirkje referred to as "Volkswagen") is represented by the Volkswagen Division of Volkswagen Sales india Private Limited, which is a company duly incorporated under the provisions of the (Indian) Companies Act, 1956. (Corporate Identity Number U50401MH2007FTC168439) having Its registered office at 3, North Avenue, Level %, Maker Maxity, Bandra Kurla Complex, Bandra (E), Mumbai 400 051. India. The corporate objective of Volkswagen Group Sales India Private Limited is to market and make available, through dealers, locally produced and imported Volkswagen vehicles / Parts and under such objective the Volkswagen Division of Volkswage Group Sales India Private Limited focuses on the marketing and sale of Volkswagen vehicle Mumbai-400 051. Bandra Kurla Complex. Fortune 2000 Building, AXIS BANK LTD. Accordingly, this Agreement is entered on day of December 2010 by and between: Volkswagen Group Sales India Private Limited (Volk....