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TMI Blog2018 (6) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... rged to the customers. The free services are being provided in pursuance to the obligation cast on the appellant by the manufacturer of the vehicles. It is not disputed by both the lower authorities that the scheme is discretionary in nature and is in the form of incentive to improve the quality of pre-delivery inspection, of three free services and for maintenance of complete control system. Hence, it is not correct to conclude that it is reimbursement for three free warranty services provided by the appellant to the buyers of the vehicles - demand set aside. Invocation of Extended period of limitation in case of second SCN - Held that:- The judicial discipline mandated that Department should not have invoked extended period in seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner (Appeals) who rejected their appeals. Aggrieved from the order of Commissioner (Appeals), the appellant has filed these appeals. 2. None appeared for the appellant. However, ld. advocate for the appellant has made a written request dated 26.04.2018 that the appeals be decided on the basis of written submissions made on 24.01.2017. In the written submissions, the appellants pleaded that the department has misunderstood the STW scheme which is a kind of reward for 100% satisfaction to the customers and to achieve certain standards as pre-delivery inspection, initial three free services and for maintenance of complete control system to provide better service to the customers. Contention is that the department admits in the show c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Ld. A.R. reiterated the findings in the order of Commissioner (Appeals). 4. After hearing the ld. AR and going through the case record including the written submissions, we find that the appellant are providing three free services during the warranty period. Admittedly, the entire cost of free service is borne by the appellant and no reimbursement is being received from the manufacturers or is being charged to the customers. The free services are being provided in pursuance to the obligation cast on the appellant by the manufacturer of the vehicles. The department while accepting this position has alleged that amount received by the appellant under STW scheme is a compensation for the services provided and was thus liable to pay ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Ministry in its Circular No. 28/2006-Cus. (sic) (Circular No. 87/05/2006-S.T.), dated 6-11-06 has clarified that where service charges are reimbursed by the vehicle manufacturers, such reimbursement should be subjected to service tax. However, it is well-known that free servicing is normally provided by the dealers in the vehicle trade meeting the expenses from the dealers margin, yet the Ministry has chosen to keep silent regarding taxability of such free servicing provided by the dealers for which no reimbursements are made by the vehicle manufacturers. It appears to us that such silence about the dominant practice of providing free servicing has resulted in some field officials taking unilateral action as in this case while majori ..... X X X X Extracts X X X X X X X X Extracts X X X X
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