2018 (2) TMI 937 - AT - Service Tax

Business Auxiliary Service - non-payment of service tax - Held that - the issue already stands decided in favour of the appellant by the Tribunal in the case of CST, Mumbai-I Vs. Sai Service Station Ltd. 2013 (10) TMI 1155 - CESTAT MUMBAI , where it was held that circular issued by MUL which provides certain incentives in respect of cars sold by the assessee respondent. These incentives are in the form of trade discount, no demand - demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appellant's liability to pay service tax on incentives received from M/s. Maruti Suzuki India Ltd.

Analysis:
The appeal was filed against Order-in-Original No. 06/2013, where the appellant, an authorized dealer for M/s. Maruti Suzuki India Ltd., was alleged to have not paid service tax on the full amounts received as incentives. The Department contended that the appellant should pay service tax on the entire amount received. The appellant argued that a similar issue had been decided in their favor by the Tribunal in the case of CST, Mumbai-I Vs. Sai Service Station Ltd. The Tribunal in the cited case observed that incentives received were in the form of trade discounts and not liable to service tax under Business Auxiliary Service. Relying on this precedent, the appeal was allowed, setting aside the impugned order.

The appellant, functioning as an authorized dealer for M/s. Maruti Suzuki India Ltd., was registered and paying service tax under Business Auxiliary Service. The Department alleged non-payment of service tax on incentives received, leading to a show-cause notice and the subsequent impugned order. The appellant contended that the issue had been previously decided in their favor by the Tribunal in a similar case, where incentives were considered trade discounts and not subject to service tax. Citing this precedent, the appeal was allowed, overturning the impugned order.

The key contention revolved around the appellant's liability to pay service tax on incentives received from M/s. Maruti Suzuki India Ltd. The Department demanded differential service tax by including the full amounts received as incentives. However, the appellant relied on a previous Tribunal decision where similar incentives were considered as trade discounts and not taxable under Business Auxiliary Service. Following this precedent, the appeal was allowed, and the impugned order was set aside.

In conclusion, the Appellate Tribunal, after considering the arguments presented by both parties and the precedent set by a previous Tribunal decision, allowed the appeal filed by the appellant. The impugned order demanding differential service tax on incentives received from M/s. Maruti Suzuki India Ltd. was set aside based on the finding that such incentives were akin to trade discounts and not liable to service tax under Business Auxiliary Service.