2018 (12) TMI 1804 - AT - Service Tax

Business Support services or not - certain charges recovered by appellant from customers purportedly for getting the vehicles registered and smart card issued by the statutory authorities as prescribed in the Motor Vehicles Act, 1988 - period between January 2011 to December 2011 - HELD THAT - Issue decided in the case of WONDER CARS PVT. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PUNE I 2016 (1) TMI 738 - CESTAT MUMBAI where it was held that The findings recorded by the lower authorities are incorrect as the definition of Business Support Services as per section 65(104c) of the Finance Act and Demand is unsustainable and liable to be set aside. Demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against order-in-appeal confirming recovery of charges for vehicle registration and smart card issuance under the Motor Vehicles Act, 1988, imposition of penalty under Finance Act, 1994.

Analysis:
The appeal before the Appellate Tribunal CESTAT MUMBAI involved M/s Sehgal Wheels Pvt Ltd challenging the recovery of charges for vehicle registration and smart card issuance from customers between January 2011 to December 2011. The original authority confirmed a tax recovery of ?4,09,516 along with interest and penalties under sections 76, 77, and 78 of the Finance Act, 1994. The Tribunal noted that the issue was similar to a previous dispute of the appellant for the period from July 2007 to December 2010. In that case, the Tribunal had considered the extra charges collected by the appellant and held that they did not fall under the category of "Business Support Services" as defined in the Finance Act. The Tribunal referred to a precedent set in Wonder Cars Pvt Ltd v. Commissioner of Central Excise, Pune – I, emphasizing that the definition of Business Support Services did not cover the services rendered by the appellant, even in the residual category of "other transaction processing."

The Tribunal, after considering the previous decision and the application to the current dispute, set aside the impugned order and allowed the appeal of M/s Sehgal Wheels Pvt Ltd. The Tribunal found that the extra charges collected by the appellant were not covered under the definition of Business Support Services as per the Finance Act, thereby concluding in favor of the appellant. The decision was pronounced in open court by the Tribunal members, thereby resolving the issue in favor of the appellant and granting relief from the tax recovery, interest, and penalties imposed by the original authority and upheld in the impugned order.