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TMI Blog2020 (4) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... h a situation, it cannot be said, under any circumstances, that MAN Germany was providing after sale service on behalf of the Appellant. After sale service was agreed to be provided by MAN Germany on its own account. The discount that is being offered by the Appellant to MAN Germany is merely an adjustment in the price of goods sold and is not towards provision of any service to be undertaken by MAN Germany on behalf of the Appellant. The service provided by MAN Germany would, therefore, not classify as BAS. The confirmation of demand, therefore, for the period 1 April, 2009 to 30 June, 2012 cannot be sustained - Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 51639 OF 2016 - FINAL ORDER NO. 50461 / 2020 - Dated:- 24-2-2020 - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT AND HON BLE MR. C.L. MAHAR, MEMBER (TECHNICAL) APPEARANCE: Shri B.L. Narasimhan and Shri Samyak Jain, Advocate for the Appellant Shri Vivek Pandey, Authorized Representative of the Department JUSTICE DILIP GUPTA 1. This appeal seeks the quashing of the order dated 22 February, 2016 passed by the Principal Commissioner, Central Excise, Indore by which the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provider located in a country other than India and the second for the period from 01.07.2012 to 31.03.2014 in respect of the declared service under Section 66E(e) of the Finance Act, 1994 from the same service provider. 22. Therefore, I am taking up the matter of demand for the period from 01.04.2009 to 30.06.2012 first. The contention of the Noticee is not with force and substance. What I perceive from the case and the relied upon documents is that MAN is working like a dealer in the foreign territory and under the agreement the Noticee have given them exclusive right to market the automobiles manufactured by them. Para 9.2 of the agreement dated 01.12.2006 clearly provides that the Noticee shall not be responsible for rendering any after sale service normally rendered by a manufacturer of automobiles and MAN shall arrange for after sale services as may be required by MAN s marketing organization or MAN s designated buyers. Thus, there is a clear transfer of responsibility by the Noticee to MAN for providing after sale service and it is a common practice in the automobile market that the said after sale service includes warranty. ***** 23. Coming to the demand of Servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ek Pandey, learned Authorized Representative of the Department has, however, supported the impugned order and has contended that: (i) From a perusal of Article 9.5 of the Agreement it is apparent that the discount of 500 Euros is in consideration of the obligation of MAN Germany for warranty and after sale services. Thus, the said amount is paid to MAN Germany for carrying out the after sale services on behalf of the Appellant, which services would, therefore, be in the nature of BAS; (ii) Since the service provider MAN Germany is located outside the territory of India and the Appellant is a recipient of service within the territory of India, it is liable to pay service tax on a reverse charge mechanism as contemplated under section 66A of the Finance Act; (iii) The extended period of limitation was correctly invoked and the Principal Commissioner committed no legality in holding that it would be applicable in the instant case; and (iv) Though the show cause notice may not have mentioned a particular sub-clause of section 65(19) of the Finance Act, but since the nature of service received by the Appellant was clearly mentioned in the show cause notice, it would b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ations or MAN s designated buyer(s). **** 9.5. In consideration of MAN s obligations for warranty and After Sales Service, MFTPL shall allow a discount of 500 (Euro Five Hundred only) per Export Product sold by MFTPL to MAN or its designated buyer(s). Provided that when the export prices are fixed in U.S. Dollars, the amount of discount shall be U.S.$500 (U.S. Dollars Five Hundred only). 10. A perusal of the aforesaid Agreement clearly shows that the Appellant had agreed to sell trucks, including spare parts for markets outside India exclusively to MAN Germany. Article 2.1 stipulates that MAN Germany shall conclude all transactions emanating under the Agreement, in its own name and for its own account. Article 9.2 provides that the Appellant shall not be responsible for rendering any after sale services and MAN Germany shall arrange for such services in each of the export markets, as may be required by the marketing organizations of MAN Germany or the designated buyers of MAN Germany. Article 9.5 provides that in consideration for the warranty and after sale service to be provided by MAN Germany, the Appellant shall allow a discount of 500 Euros from the export pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... MAN Germany shall arrange for such services as may be required by its marketing organizations or its designated buyers. Article 9.5 basically provides that as MAN Germany has to provide warranty and after sale service, the Appellant shall allow a discount of Euros 500 on the product sold by the Appellant to MAN Germany. This does not in any manner mean that MAN Germany was rendering after sale service on behalf of the Appellant. In fact, the agreement is to the contrary. It provides that the Appellant shall not be responsible for rendering any after sale service. In such a situation, it cannot be said, under any circumstances, that MAN Germany was providing after sale service on behalf of the Appellant. After sale service was agreed to be provided by MAN Germany on its own account. The discount that is being offered by the Appellant to MAN Germany is merely an adjustment in the price of goods sold and is not towards provision of any service to be undertaken by MAN Germany on behalf of the Appellant. The service provided by MAN Germany would, therefore, not classify as BAS. 14. This would also be clear from the statement of Shri Abhay Athavale, Senior General Manager (Finance) o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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