2013 (7) TMI 99 - AT - Service Tax

Waiver of pre deposit demand of service tax by registered dealers - The applicant is a registered dealer selling cars on payment of appropriate VAT Held that - Applicants are purchasing and selling the cars - it cannot be said that the applicants are commission agent of the car manufacturer - the demand is not sustainable. Customer care services - Providing assistance in respect of registration- contended that the applicant is provided business auxiliary services Held that - Applicants are not promoting the business of state transport authorities but are only providing assistance to the car purchasers applicant is not providing the customer care services. Waiver of pre-deposit Part of the service tax was said to be deposit and on the pre-deposit of the balance amount of service tax, interest and penalties are waived.

Summary

Issues involved:
- Waiver of pre-deposit of service tax, interest, and penalties
- Whether the applicants are acting as commission agents of the car manufacturers
- Whether the applicants are providing customer care service on behalf of the manufacturer
- Whether the applicants are promoting the business of state transport authorities
- Whether the applicants are negotiating with banks on behalf of customers regarding car loans

Analysis:

The judgment by the Appellate Tribunal CESTAT Mumbai involved the issue of waiver of pre-deposit of service tax, interest, and penalties totaling Rs. 3,15,81,666. The applicants, dealers of motor vehicles of M/s Toyota Kirloskar Motors Ltd., faced demands related to acting as commission agents, providing customer care service, and negotiating with banks on behalf of customers for car loans.

Regarding the demand of Rs. 2,02,82,946, the contention was that the applicants were not acting as commission agents but were registered dealers purchasing and selling cars, making the demand unsustainable. The Tribunal found merit in this contention, stating that the applicants were not commission agents of the manufacturer.

Concerning the demand of Rs. 65,56,549, the applicants argued that they were providing assistance to car purchasers for car registration and not customer care service on behalf of the manufacturer. The Tribunal agreed, noting that the applicants were not promoting the business of state transport authorities but merely assisting car purchasers.

For the demand of Rs. 22,09,353, the applicants negotiated with banks on behalf of customers for car loans, sometimes foregoing part of their commission. The Tribunal found that the applicants were receiving commission from banks and did not make a case for waiver of pre-deposit in such instances.

Ultimately, the Tribunal directed the applicants to deposit Rs. 10 lakhs within eight weeks, after which pre-deposit of the remaining amount of service tax, interest, and penalties would be waived. The decision was based on the specific circumstances of the case and the findings related to the applicants' roles in the transactions.