2023 (10) TMI 885 - AT - Service Tax

Validity of SCN - SCN issued on the basis of the earlier order of the Adjudicating Authority - earlier remand not yet been completed - Levy of Service Tax - warranty service provided to the customers - Appellant claims it to be free service as no amount was recover from the customers towards warranty - HELD THAT - The present show-cause notice being issued on the basis of the earlier order of the Adjudicating Authority, with consent and concurrence of both the parties, having regard to the fact that de novo adjudication in respect of earlier remand has not yet been completed, it is considered proper to remand the matter back to the Commissioner for re-adjudication in terms of the direction contained in Hon'ble Bombay High Court in Tata Motors Ltd. 2023 (7) TMI 952 - BOMBAY HIGH COURT in respect of the previous period. Appeal allowed by way of remand.

Summary

Issues involved: Challenge to legality of Order-in-Original confirming demand for reimbursement of expenditure on warranty obligations, remand for re-adjudication based on earlier tribunal and high court orders.

Challenge to legality of demand for warranty service: Appellant, Tata Motors Ltd., challenged the legality of the Order-in-Original confirming a demand of Rs.35,84,15,280 for the period 2014 to 2015, related to reimbursement of expenditure on warranty obligations. The demand included interest and penalty under Section 75, 76, and 77 of the Finance Act, 1994. The issue arose from the Service Tax liability towards warranty service provided to customers, which the Appellant claimed to be free service as no amount was recovered from customers for warranty. The Appellant contested the confirmation of demand raised against warranty service, leading to the appeal before the Tribunal.

Remand for re-adjudication: During the hearing, it was revealed that show-cause cum-demand notices were issued to the Appellant for the period between 2004 and 2014, resulting in adjudication against the Appellant. The matter was then taken to the Tribunal, which remanded the issue back to the Original Authority for redetermination of tax liability and quantification of various raised issues. Subsequently, the Appellant approached the Hon'ble High Court of Bombay, which upheld the remand order with a direction to decide the entire matter on merit, including jurisdictional issues. Given the pending de novo adjudication from the earlier remand, the Tribunal decided to remand the matter back to the Commissioner for re-adjudication in accordance with the directions from the Hon'ble Bombay High Court order dated 20.07.2023.

Final Order: The Tribunal allowed the appeal by way of remand, setting aside the Order-in-Original passed by the Commissioner of Central Tax & CGST Thane, Mumbai. The decision was pronounced in the open court on 18.10.2023.