2019 (1) TMI 716 - AT - Service Tax

Business Auxiliary services - Sales Incentives received by the appellant from M/s Tata Motors Ltd. - demand of service tax - Held that - In the case of Sai Service Station Ltd. 2013 (10) TMI 1155 - CESTAT MUMBAI , this Tribunal had held that demand raised on sale target incentives cannot be considered as Business Auxiliary Service - demand do not sustain. Business Auxiliary services - short payment of service tax - case of Revenue is that if the appellant is having documents and records for verification then the matter can go back to the Original Authority for re-verification - Held that - In respect of the confirmation of demand of ₹ 24,93,761/-, matter remanded to the Original Authority with direction re-examined the whole issue taking into consideration the documents that are available on record with a freedom to appellant to submit any such documents which they want to rely - matter remanded. Renting of Immovable Property - demand of service tax - extended period of limitation - Held that - Since the matter was under litigation in respect of renting of immovable property, this matter is remanded to the Original Authority with direction to examine the issue after given an opportunity to the appellant to present their case. Appeal allowed in part - part matter on remand.

Summary

Issues Involved:
1. Demand of Service Tax on Sales Incentives
2. Allegation of short payment of Service Tax under Business Auxiliary Service
3. Demand of Service Tax on Renting of Immovable Property

Analysis:

Issue 1: Demand of Service Tax on Sales Incentives
The first issue in the present appeal pertains to the demand of Service Tax amounting to ?75,62,660 on Sales Incentives received by the appellant from M/s Tata Motors Ltd. The appellant contended that the incentives received were in the form of cash discount or turnover discount and not commission on sales. The Tribunal referred to a previous decision where it was held that demand raised on sale target incentives cannot be considered as Business Auxiliary Service. Relying on this precedent, the Tribunal set aside the demand of ?75,62,660 along with interest and equal penalty.

Issue 2: Allegation of short payment of Service Tax under Business Auxiliary Service
The second issue involves an allegation of short payment of ?24,93,761 under Business Auxiliary Service. The appellant argued that they had actually paid a higher amount than what was considered by the Revenue. There were discrepancies in the total consideration received under Business Auxiliary Service, with the appellant claiming a lower amount. The Tribunal decided to remand the matter to the Original Authority for re-examination, considering the documents available on record and allowing the appellant to submit additional evidence.

Issue 3: Demand of Service Tax on Renting of Immovable Property
The third issue concerns the demand of Service Tax amounting to ?1,12,260 on Renting of Immovable Property for the period from 2007-08 to 2011-12. The appellant argued that since the issue was under litigation, the extended period of limitation could not be invoked. The Tribunal agreed with the appellant and remanded the matter to the Original Authority for further examination after providing an opportunity for the appellant to present their case.

In conclusion, the Tribunal partly allowed the appeal by setting aside the demand, interest, and penalty related to the sales incentives involving service tax, while remanding the remaining matters to the Original Authority for further review and examination based on the evidence and submissions presented.