2024 (5) TMI 560 - AT - Service Tax

Levy of service tax on rebate/subsidy received from Suzuki Japan - reimbursement expenses in respect of after sale warranty services, miscellaneous expenses - Cenvat Credit on reimbursable advertisement expenses - extended period of limitation - penalty - HELD THAT - It is not in dispute that this issue for the previous period i.e. 2006-07 and 2007-08, has already been decided in favour of the appellant in their own case SUZUKI MOTORCYCLE (I) PVT. LTD. VERSUS COMMISSIONER OF C. EX., DELHI-III 2015 (7) TMI 633 - CESTAT NEW DELHI where it was held that ' Merely because the appellants stand reimbursed part cost of the advertising expenses from their parent company, does not mean that the appellants would become disentitled to the Service Tax actually paid by them.' and the same has attained finality. Rebate received from Suzuki Japan and denial of Cenvat Credit on reimbursable advertisement expenses - HELD THAT - Reference made to the decision of in the case of M/S. SRF LTD. VERSUS COMMISSIONER, CENTRAL EXCISE SERVICE TAX, LTU, NEW DELHI 2021 (8) TMI 696 - CESTAT NEW DELHI , wherein the Tribunal after following the decision of ROSMERTA TECHNOLOGIES LTD. VERSUS COMMISSIONER OF CE ST, LTU DELHI 2019 (11) TMI 1573 - CESTAT CHANDIGARH has held that if an order attained finality, the Department cannot take contrary stands in the other pending appeal with regards to the same assessee. Since, the issue is no more res integra and stands settled in favour of the appellant in their own case for the previous period as well as for the subsequent period, and the Department has accepted the same, the impugned order is not sustainable in law and therefore, is set aside by allowing the appeal of the appellant with consequential relief, if any, as per law. Appeal allowed.

Summary

Issues Involved:
1. Service Tax on Business Support Services
2. Denial of Cenvat Credit on advertisement expenses
3. Short payment of service tax

Summary:

1. Service Tax on Business Support Services:
The appellant contested the demand of service tax on Business Support Services amounting to Rs. 65,70,258/-. The appellant argued that the subsidy/rebate provided by Suzuki Japan was to compensate for the difficulty in selling expensive bikes in India and did not constitute a provision of service. The Tribunal cited previous rulings in the appellant's favor, including the case of *Balaji Enterprises vs. Commissioner of CE & ST, Jaipur-I - 2020 (33) G.S.T.L. 97 (Tri.-Del.)*, which held that price rebates do not amount to the provision of any service. The Tribunal concluded that the rebate is a discount on the purchase price and not consideration for any service, thus not leviable to service tax.

2. Denial of Cenvat Credit on Advertisement Expenses:
The appellant challenged the denial of Cenvat Credit on advertisement expenses reimbursed by Suzuki Japan, amounting to Rs. 6,21,90,039/-. The appellant argued that the advertisement services qualify as 'input services' u/r 2(l) of the Cenvat Credit Rules, 2004, and the reimbursement by Suzuki Japan does not affect the entitlement to credit. The Tribunal referenced its previous decision in the appellant's own case for the period 2006-07 and 2007-08, which had attained finality and was not appealed by the Department. It was held that reimbursement of part cost of advertising expenses does not disentitle the appellant to the credit of service tax paid.

3. Short Payment of Service Tax:
The appellant was accused of short-paying service tax by Rs. 85,841/-. The Tribunal found that the issue had already been settled in favor of the appellant for the previous and subsequent periods, and the Department had accepted the rulings. The Tribunal emphasized that the Department cannot take contrary stands on the same issue for the same assessee.

Conclusion:
The Tribunal set aside the impugned order, which confirmed the demand of service tax and denial of Cenvat Credit, and allowed the appeal with consequential relief. The Tribunal reiterated that the issues were already settled in favor of the appellant for previous and subsequent periods, and the Department had not challenged those decisions. The judgment emphasized the principle that the Department cannot take inconsistent positions in proceedings involving the same issues for the same assessee.