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TMI Blog2018 (6) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee by this Tribunal in the case of Jabalpur Motors Ltd. [2015 (1) TMI 1140 - CESTAT NEW DELHI], where it was held that the respondents have not provided the service of authorised service station to them (i.e. M/s. MUL). Accordingly this amount cannot be made liable to service tax under the category of authorised service station service. Appeal allowed - decided in favor of appellant. - ST/582/2008-DB, ST/583/2008-DB - 20665-20666/2018 - Dated:- 20-4-2018 - MR. S.S GARG, JUDICIAL MEMBER And MR. DEVENDER SINGH, TECHNICAL MEMBER Mr. Kuriyan Thomas, Advocate For the Appellant Mrs. Kavitha Podwal, AR For the Respondent Per : DEVENDER SINGH These two appeals have been filed against the Order-in-Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adjudicating authority and the first appellate authority had relied on the wrong clause of the agreement between the appellant and M/s. HMIL. He also stated that the issue of free warranty was covered in the clause 7.3(b) of the said agreement. He also contended that the issue of liability of service tax on free warranty provided by the authorized service station to car purchasers was covered by the judgment rendered by this Tribunal in the case of CCE, Indore vs. Jabalpur Motors Ltd.: 2014 (36) STR 1160 (Tri.-Del.) and CCE, Nashik vs. Automotive Manufacturers Ltd.: 2016 (42) STR 448 (Tri.-Mumbai). He also submitted that the appellant has not received any consideration by way of reimbursement towards provision of free services, which are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der such scope regardless of whether the Hyundai Products have been purchased from them or any other Hyundai dealer. In case the servicing dealer is different from the selling dealer the servicing dealer will service the Hyundai products, as per the policies procedures laid down by HMI from time to time. DEALER shall adhere to the changes in respect of the policies procedures as notified by HMI from time to time. 6.2 From the above, it is evident that the show-cause notice as well as the orders of both the lower authorities are based on Clause 4.4 of the dealership agreement, which is not related to free warranty. Free warranty is provided in terms of clause 7.3 of the agreement. The said clause does not provide for any reimbursement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eimbursed by Maruti Udyog Ltd., it is seen that Maruti Udyog Ltd. have categorically stated that they do not reimburse any amount towards such free services to the dealers. The respondents have also stated that providing such free services is part of the functions and duties of dealers who are entitled to the dealership commission. Also the free services are rendered to the car buyers and not to M/s. MUL and the car buyers pay nothing therefor. Seen in this light it is evident that the demand of service tax as per column 5 of the table above is misconceived. Coming to the demand of service tax on the amount received on account of salary of drivers of vans used for providing mobile service to the car owners shown in column 4 of the table, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade 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 majority of the dealers are not taxed on free servicing provided by them. 5. We also find that in the constitutional scheme of things, there is mutual exclusivity between the taxability of sale of goods, which is charged to sales tax by the State; the excise duty on manufactured goods which is levied by the Centre; and the tax on services, which is also levied by the Centre. The impugned amount in question is a part of the dealers margin which has been recovered by the appellants as a part of the sale value of the cars from ..... X X X X Extracts X X X X X X X X Extracts X X X X
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