2018 (8) TMI 248 - AT - Service Tax

Small service provider - exemption upto ₹ 10 lacs - use of brand name of others - Benefit of N/N. 6/2005-ST - Business Auxiliary services - difference between the dealer price and the price at which the appellant ultimately sells the airconditioner - Installation and maintenance Service - activities of installation and maintenance carried out by the appellant for which consideration was received from M/s Voltas Limited - Held that - The issue of taxability has never been raised before the lower Appellate Authority. A perusal of the impugned order reveals that the only issue raised before the lower authority was the entitlement to N/N. 6/2005 - the fresh argument on merits cannot be allowed to be raised at the stage of the present appeal. Entitlement of the appellant for the benefit of N/N. 6/2005-ST - Held that - The service of installation and maintenance has been provided by the appellant on behalf of M/s Voltas, as per the agreement entered with them - there is no reason to interfere with the finding of the lower authority that the appellant is not entitled to the benefit of such SSI Notification since the appellant has provided the services under the brand of Voltas . Appeal dismissed - decided against appellant.

Summary

Issues:
- Liability for service tax on commission received by the appellant.
- Liability for service tax on installation and maintenance services provided by the appellant.
- Entitlement to benefit under Notification No. 6/2005-ST.

Liability for Service Tax on Commission Received:
The appellant, a dealer of air conditioners, procures products from a manufacturer and sells them to customers. The Department claimed that the price difference constitutes a commission subject to service tax under "Business Auxiliary Service." The appellant argued that the price difference is not a commission as they purchase at dealer price and sell at MRP. The Tribunal noted that the issue of taxability was not raised before the lower authority, and fresh arguments on merits cannot be entertained at the appeal stage. Consequently, the Tribunal declined to consider the appellant's arguments on this issue.

Liability for Service Tax on Installation and Maintenance Services:
The Department contended that the charges received by the appellant from the manufacturer for installation and maintenance services are subject to service tax. The appellant argued that these charges were already included in the product price on which excise duty was paid by the manufacturer. The Tribunal observed that the appellant provided these services on behalf of the manufacturer, and as such, upheld the lower authority's decision that the appellant is not entitled to the small scale exemption under Notification No. 6/2005-ST. Therefore, the Tribunal sustained the decision that service tax is applicable to these services.

Entitlement to Benefit under Notification No. 6/2005-ST:
The appellant sought the benefit of Notification No. 6/2005-ST for small scale exemption. However, the Tribunal found that since the appellant provided installation and maintenance services under the brand name of the manufacturer, they are not eligible for the exemption. The Tribunal upheld the lower authority's decision denying the appellant the benefit of the notification. Consequently, the appeal was rejected, and the impugned order was sustained by the Tribunal.