2025 (3) TMI 431 - AT - Service Tax

Levy of service tax on labour income and target incentive - HELD THAT - The issue in the present case is squarely covered by the decision of this Tribunal in appellant s own case 2024 (4) TMI 1232 - CESTAT ALLAHABAD wherein it is held that the service tax demands on incentives sale of goods and services were not legally sustainable. The impugned order is set aside - appeal allowed.

Summary

The appeal before the Appellate Tribunal, CESTAT Allahabad, was directed against an Order-in-Appeal passed by the Commissioner (Appeals) Central Excise & CGST, Noida. The Commissioner's order modified the demand of service tax on the sale of spares, accessories, and oils, confirming the demand on labor income and target incentives while also modifying the levy of penalties. The appellant provided taxable services such as Business Auxiliary Service and Authorised Service Station Services. A show cause notice was issued to the appellant for non-discharge of tax liability properly, leading to the demand of service tax, interest, and penalties.The Order-in-Original confirmed the demand of service tax, imposed interest, and penalties on the appellant. The appellant's appeal before the Commissioner (Appeals) was dismissed, leading to the present appeal before the Tribunal. The appellant sought an adjournment, which was opposed by the Authorized Representative for the revenue. The Tribunal considered the impugned orders, submissions made during the appeal, and previous decisions in the appellant's own case.The Tribunal noted that the issue in the present case was previously decided in the appellant's favor in a Final Order of 2024, which was further supported by a decision in 2018. The Tribunal cited precedents where it was held that the value of parts used during repair services should not be added to the value of services provided. Similarly, incentives received for achieving targeted sales were not considered part of the value of services. Based on these precedents, the Tribunal set aside the impugned order and allowed the appeal with consequential relief.In conclusion, the Tribunal set aside the impugned order, allowing the appeal and providing relief to the appellant based on established legal principles and precedents.