2014 (10) TMI 168 - AT - Service Tax

Liability of service tax on purchase and sale of used cars - Whether this service can be considered as sale - Held that - the property is delivered and the price has been received by the seller of the old car. Therefore, the first transaction cannot be considered as the one which is not a sale. There is no doubt as to the second transaction whether it is a sale or not. once the first transaction is considered as sale it means that the vehicle has been purchased by the appellant subsequently sold by them. Therefore it becomes totally a transaction of purchase and sale of old vehicles - activities are undertaken as value addition by them and it is neither for the seller nor the purchaser. It is an activity undertaken to increase the value of the vehicle so that they get the maximum return out of it. Therefore we cannot say that there is a service element in this transaction either. As regards the invoices produced before us there is no clarity being there as to whether the Commissioner has seen these documents - In any case there is no observation saying that the vehicles were not sold under an invoice by the appellants - appellants have made out a case in their favour completely - Following decision of M/s Sai Service Station Ltd Versus Commissioner of Central Excise, Customs and Service Tax 2014 (4) TMI 640 - CESTAT BANGALORE - Decided in favour of assessee.

Summary

Issues:
Liability of service tax on purchase and sale of used cars by the appellant who is a dealer of Maruthi Suzuki India Ltd.

Analysis:
The appellant, an authorized dealer of cars and accessories manufactured by Maruthi Suzuki India Ltd, faced an issue regarding service tax for the period from 10/2006 to March 2011 and for 2011-2012. Apart from service tax, penalties under various sections of the Finance Act were also imposed. The Tribunal found that the issue before them was similar to a previous case heard on 13.02.2014, where the Tribunal had allowed the appeal concerning the liability of service tax on the purchase and sale of used cars by the appellant. The Tribunal noted that the observations in the current case were a reproduction of observations made in the previous case, indicating the similarity of the situations. As a result, following the precedent decision of the Tribunal, the appeal was allowed with consequential relief, if any, to the appellants. The operative part of the order was pronounced in court on 19.02.2014.

This detailed analysis of the judgment highlights the key issue of the liability of service tax on the purchase and sale of used cars by the appellant, who is an authorized dealer of Maruthi Suzuki India Ltd. The Tribunal's decision was influenced by a previous case with similar circumstances, where the appeal was allowed. The judgment emphasizes the importance of consistency in legal decisions and the application of precedent in determining the outcome of cases.