Custom, Excise & Service Tax Tribunal
M/S. Yash Motors vs C.C.E. Jaipur-Ii on 22 December, 2016
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. III
Service Tax Appeal No. ST/1617/2011-ST[DB]
[Arising out of Order-In-Appeal No. 357(CB)ST/JPR-II/2011 dated 09.08.2011 passed by Commr. (Appeals) Jaipur]
For approval and signature:
Hon'ble Mr. S.K. Mohanty, Member (Judicial)
Honble Mr. B. Ravichandran, Member (Technical)
1
Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2
Whether it should be released under Rule 27 of the 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?
M/s. Yash Motors ...Appellant
Vs.
C.C.E. Jaipur-II Respondent
Appearance:
Mr. Kr. Vikram (Advocate) for the Appellant Mrs.Neha Garg, DR for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Honble Mr. B. Ravichandran, Member (Technical) Date of Hearing/ Decision.22.12.2016 Final Order No. 56095 /2016 Per B. Ravichandran:
The appellant is an authorized motor vehicle dealer. The dispute is relating to their service tax liability on certain consideration received by them from Insurance Company for promoting their insurance business with reference to new cars sold by the appellant. The lower authorities confirmed the Service Tax liability and also imposed penalties under Section 76 and 78 of the Finance Act, 1994.
2. The Ld. Counsel for the appellant is not contesting the demand on merits. He only pleaded that the matter is one of interpretations and that they were registered with the Department and paying service tax regularly. They were provided some space with a table and chair to the insurance company to help the customers get the car insured on the spot. For this they have received certain consideration from the insurance company. He admitted that the said consideration is accounted for as commission in their balance sheet. He pleaded that they have provided space with some facilities to the insurance company and believed such a support to the insurance company is not to be taxed under BAS in view of the earlier decisions of the Tribunal in Tribhuvan Motors Ltd. 2010 (17) STR 281 (Tri. Bang.) and Chadha Auto Agencies 2008 (11) STR 643 (Tri. Bang.). He pleaded for restricting the demand to the normal period and setting aside the penalties imposed on them.
3. The Ld. AR submitted that the appellants have clearly provided promotional service to the insurance company. The amount received is clearly shown as commission. Their providing table and chair to the insurance company is purely incidental and that is not the reason for which they received consideration. There is no dispute regarding that tax liability under BAS as the matter has been well settled under various decisions of the Tribunal. Reference was invited to one of such decision in South City Motors 2012 (25) STR 483 (Tri. Del). The demand as such cannot be contested.
4. We have heard both the sides and perused the appeal records.
5. There is no contest on service tax liability on merit. We find that the appellants have provided BAS of promoting the business of the insurance company to the buyers of new cars. Admittedly, they received commission for such service from the Insurance company and accounted the same as such in their balance sheet. The space provided is incidental to such promotion and the charges received are not for such space alone. As such, we find the appellants liability for service tax cannot be contested however, regarding penalty we find in terms of Section 80 of the Finance Act, 1994 waiver can be granted as pleaded by the Ld. Counsel by the appellant. The services rendered are with incidental facility of space with some infrastructure provided to the insurance company. As pointed out by appellant providing of space has been held to be not covered by BAS in some of the decisions of the Tribunal referred to above. Considering the above position, we are inclined to waive the penalties imposed on the appellant. As such in view of the above discussion, we find the service tax liability against the appellant is rightly confirmed. The penalties are waived as stated above.
(Dictated and pronounced in the open court)
(B. Ravichandran) (S. K. Mohanty)
Member(Technical) Member (Judicial)
Neha
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ST/1617/2011-[DB]