2023 (9) TMI 1253 - AT - Service Tax

Levy of Service Tax - free services provided by the appellant, an authorised dealer and service station of Maruti Udyog Ltd., to the customers during the warranty period for the sale of cars - HELD THAT - It was noticed by the Commissioner (Appeals) in the order dated 13.04.2021, while deciding another appeal filed by the appellant to assail the order dated 03.03.2020 passed by the Superintendent, that the demand made in respect of a similar issue was set aside by the Tribunal and the appeal was allowed on 21.11.2008. - There is nothing on record to indicate that the aforesaid order dated 13.04.2021 passed by the Commissioner (Appeals) was assailed by the department or has been set aside by the Tribunal. It is not possible to accept the contention advanced by the learned authorised representative as the decision of the Tribunal in HINDUSTAN AUTO HOUSE (P) LTD. VERSUS CCE, JAIPUR 2008 (9) TMI 83 - CESTAT NEW DELHI squarely applies to the facts of the present appeal. When the issue raised in this appeal has been decided in favour of the appellant, the order dated 16.11.2017 passed by the Commissioner (Appeals), which has given rise to the four appeals, deserves to be set aside and is set aside - Appeal allowed.

Summary

Issues involved:
The issue involved is whether service tax is payable on the amount for the free services provided by the appellant, an authorized dealer and service station of Maruti Udyog Ltd., to the customers during the warranty period for the sale of cars.

Judgment Details:

Issue 1: Service Tax Liability on Free Services
The Commissioner (Appeals) dismissed the appeals and confirmed the demand of service tax with interest and penalty. The appellant argued that previous Tribunal decisions supported their position, citing Hindustan Auto House case and other favorable rulings. The authorized representative for the department contended that the previous Tribunal decision was on different grounds and not applicable to the present case. The Tribunal analyzed the situation and noted that the free services provided were already included in the price of the vehicle, excise duty, and sales tax. There was no evidence of specific reimbursement by the vehicle manufacturer for these services. As no service charges were paid by customers when availing of these services, the imposition of service tax and penalties was deemed unsustainable based on the principles outlined in the Hindustan Auto House case. The Tribunal found in favor of the appellant, setting aside the Commissioner (Appeals) order and allowing all four appeals.

Separate Judgment by Judge:
No separate judgment was delivered by the judges in this case.

This summary provides a detailed breakdown of the judgment, focusing on the key issue of service tax liability on free services provided by the appellant. The Tribunal's analysis, reference to previous decisions, and final decision are highlighted for clarity.