2017 (11) TMI 696 - AT - Service Tax

Valuation - reimbursement discount - includibility - Held that - the finding of Original Authority in respect of discount dealt with in Para 12.9 of the impugned Order-in-Original and amounts written back dealt with in Para 17 of the impugned Order-in-Original are presumptive in nature and on the basis of presumptions the demand cannot be confirmed - appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
Appeal against Order-in-Original passed by Commissioner of Central Excise & Service Tax, Agra for recovery of Service Tax, penalties imposed under Sections 76 and 77 of the Finance Act, 1994.

Detailed Analysis:

1. Statement of Demand and Original Authority's Decision:
The appellants received a statement of demand in continuation of a Show Cause Notice for the period from 2010-11 to 2013-14, with a subsequent demand for the Financial Year 2014-15 amounting to ?1,06,30,066. The Original Authority confirmed a demand of ?2,32,895 and dropped the demand of ?1,03,97,171, imposing penalties under Sections 76 and 77 of the Finance Act, 1994.

2. Appellant's Contention and Arguments:
The appellant contested the demand related to reimbursement discount and credit balance written back. The appellant argued against the confirmation of demands of ?1,03,386 and ?26,633, stating that the findings of the Original Authority were presumptive in nature and lacked clarity. The appellant emphasized that the amounts in question were related to servicing of motor vehicles and taxable services.

3. Revenue's Support and Tribunal's Decision:
The Revenue supported the Original Authority's decision. After considering the contentions, the Tribunal found the findings of the Original Authority to be presumptive. Consequently, the Tribunal set aside the confirmed demands of ?1,03,386 and ?26,633. Additionally, the Tribunal modified the penalty imposed under Section 76 of the Finance Act, 1994, reducing it by ?13,002. The Tribunal allowed the appeal, providing the appellant with consequential relief as per law.

4. Final Verdict and Conclusion:
The Tribunal, led by Mr. Anil G. Shakkarwar, Member (Technical), concluded that the demands confirmed by the Original Authority were based on presumptions and lacked sufficient clarity. As a result, the Tribunal overturned the confirmed demands and reduced the penalty amount. The appellant was granted relief in accordance with the modified Order-in-Original.