Custom, Excise & Service Tax Tribunal
Rkbk Automobiles Pvt. Ltd vs C.C.E., Allahabad on 10 July, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, CIRCUIT BENCH AT ALLAHABAD Date of hearing/decision: 10.7.2015 Service Tax Appeal No.1095 of 2010 Arising out of the order in appeal No.26/ST/ALD/2010 dated 29.4.2010 passed by the Commissioner (Appeals) Central Excise and Service Tax, Allahabad. For approval and signature: Honble Mr. Justice G. Raghuram, President Honble Mr. H.K. Thakur, Technical Member 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 26 of the CESTAT (Procedure) Rules, 1982? 2 Whether it should be released under Rule 26 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? 4 Whether Order is to be circulated to the Departmental authorities? RKBK Automobiles Pvt. Ltd. . Appellant Vs. C.C.E., Allahabad .. Respondent
Appearance:
Present Shri K.K. Srivastava, Advocate for the appellant Present Shri B.B. Sharma, A.R. for the Respondent/Revenue Coram: Honble Mr. Justice G. Raghuram, President Honble Mr. H.K. Thakur, Technical Member Final Order No. 52167/2015 Per Justice G. Raghuram:
Heard the ld. Counsel for the appellants and the ld. A.R. for the respondent/Revenue. The appellant is the assessee and has preferred this appeal against the order dated 29.4.2010 passed by the ld. Commissioner (Appeals), Central Excise, Allahabad. The impugned order granted part relief to the assessee in the appeal preferred by it, to the extent of dropping penalty under Section 76 of the Finance Act, 1994 while confirming the primary adjudication order dated 23.7.2009 passed by the Assistant Commissioner, Central Excise, Gorakhpur whereby service tax demand of Rs.1,58,384/- along with interest under Section 75, and penalty of an equivalent amount under Section 78 of the Act was confirmed, apart from penalty under Section 76 which as already stated was dropped by the lower appellate authority.
2. Proceedings were initiated against the appellant for under-remittance of service tax during October 2003 to March 2005. The appellant obtained registration for providing services as an authorised service station for service or repair of vehicles and for providing Business Auxiliary Service (BAS) as well. The appellant is also the Maruti Authorised Service Station, apart from being a dealer of Maruti brand vehicles.
3. Investigations revealed that the appellant charged labour and service charges on refurbishment services and raised invoices on RKBK True Value, reflecting in each invoice, the appropriate service tax component as well, but failed to remit service tax to the exchequer. Refurbishment of old vehicles involved repairs, change of defective parts and other value additions to provide a fresh look to old cars.
4. In response to the show cause notice , the appellant claimed that it had purchased vehicles, refurnished and repaired them at its own workshop and thereafter would sell these vehicles to customers under the Maruti brand True Value. Since refurbishment was done on old cars purchased by it was a service to itself, and would not amount to service provided to another, was the substantive defence presented before the primary authority and reiterated before the lower appellate authority as well.
5. Both the authorities below rejected this defence and confirmed the demand for service tax, interest and penalties, subject to appellate modification by way of dropping penalty under Section 76. Concurrent findings recorded by the authorities below was that evidence/material on record established that invoices were raised by the appellant on RKBK True Value and these indicated not only the value of repairs and refurbishment provided but also the UP Trade Tax and the service tax components. From the invoices (provided by the appellant itself before the adjudicating authorities), the authorities below legitimately drew the inference that the specified taxable service was provided by the appellant to RKBK True Value, another entity for which not only were invoices raised on the later, but the invoices clearly and categorically included components of UP Trade Tax and service tax.
6. Ld. Counsel for the appellant contends that sales tax was remitted by it whennever refurbished vehicles were sold to customers. The fact that sales tax was remitted to the State Exchequer on sale of refurbished vehicles to customers, would not by itself establish an immunity of the appellant to service tax. For the purpose of levy and collection of service tax, appellants own invoices raised on RKBK True Value probablise the inference that the appellant is one entity and RKBK True Value is another entity; and that appellant had raised invoices on the other entity reflecting elements of UP Trade Tax and Service Tax. If, as Counsel for the appellant contends, appellant and RKBK True Value are separate entities, neither would there be an occasion in law or under any accounting practice, for invoices to be raised on oneself and reflecting elements Trade Tax or Service Tax, in such invoices. Sale of goods, as is well established is a transfer of title in goods from one party to another. If, on the appellants contention itself and RKBK True Value are merely units of a common legal entity, no question of raising invoices or indicating components of Trade Tax or Service Tax would arise. The plea of providing services to itself , is thus misconceived
7. We however notice that neither the primary adjudication order nor the impugned order intimated the appellant/ assessee regarding the facility available under Section 78, of remitting the confirmed demand of tax, interest and 25% of the penalty within the period of 30 days towards compliance with the liability assessed. In the light of judgments of several High Courts on this aspect of the matter, we therefore declare that the appellant is at liberty to remit the assessed component of service tax, the interest thereon and 25% of the penalty under Section 78 as stands confirmed by the lower appellate authority, within 30 days from today towards compliance with its liability confirmed by the impugned order.
8. On the aforesaid analyses, we find no substantial error in the concurrent findings recorded by the primary and lower appellate authorities, that the appellant had provided the taxable service to RKBK True Value and had collected service tax and was in any event liable to service tax, in view of invoices produced by the appellant itself. The impugned order is impeccable and warrants no interference. The appeal is therefore dismissed subject to the observation in the preceding para, but in the circumstances without costs.
(Justice G. Raghuram) President (H.K. Thakur) Technical Member scd/ 1