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TMI Blog2023 (2) TMI 234X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the demand has already been dropped by the Commissioner in the impugned order. Part of the demand has been confirmed because the appellant was not able to give separately the receipts on account of supplies and consumables and labour receipts. The appellant has now submitted these details before us. There is no dispute regarding the taxability itself with respect to this part of the demand. Demand on the incentives received by the appellant from Tata Motors for meeting sales targets - HELD THAT:- It is undisputed that the agreement is titled dealership agreement and that it also clarifies that the appellant has to purchase vehicles from Tata Motors and then sell them. If it meets the targets it gets additional incentives. This in our considered view, is in the form of a trade discount. Trade discount can take many forms, such as, cash discount, quantity discount, year end discount, etc. These incentives are in the form of year end discount. This is an incentive given to encourage the dealer to buy and sell larger number of vehicles. It is not a payment for any service rendered to the manufacturer. In market, buyers who purchase larger quantities of any good often get a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, this appeal has been filed by the appellant. 2. The appellant was registered with the Service Tax Department under the categories of Business Auxiliary Services [BAS], Authorized Service Station Services [ASS] and Renting of Immovable Property Service [RMPS]. It is the authorized dealer of Tata Motors Ltd. [Tata] for sale, service and spare parts of medium and heavy commercial vehicles in 5 districts of Rajasthan. The appellant was purchasing such vehicles from Tata on its own account and thereafter selling them to the customers. On sales, the appellant was paying Value Added Tax [VAT]. According to the appellant, the dealings between Tata and itself were on principal to principal basis. However, if the appellant met specific sales targets various incentives were available to the appellant as per the policy of the Tata. 3. The appellant was also authorized to service vehicles and for servicing the appellant was collecting service charges and cost of spares from its customers. The appellant was also undertaking servicing during the warranty period and for such services, the service charges were paid by Tata along with the cost of spares used in servicing during such Warrant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... targets. Therefore, these receipts were not for rendering any service, but were trade discounts, which are not exigible to service tax. Hence, no service tax payable. 7. As far as Sl. No. 02 of the table is concerned, according to learned Consultant no service tax was payable upto 30.06.2012 as only servicing of motor cars, light motor vehicles and two-wheeler motor vehicles were taxable under section 65 (105) (zo) of Finance Act, 1994. From 01.07.2012, servicing of all types of vehicles became taxable. The Commissioner dropped the demand for the period upto 31.03.2012. For the period 01.04.2012 to 30.06.2012 since the break-up of the receipts towards services during warranty and the cost of spares and consumables used during servicing was not available, he confirmed service tax on the entire amount. The appellant has already paid VAT on the cost of spares and, therefore, service tax cannot be charged on this account. Further, according to the learned Consultant the appellant has already paid service tax on the amounts received towards labour under warranty repairs during the period 2012-2013. Learned Consultant has submitted the following break-up of the receipts during this p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Vehicles ], spare parts and accessories thereof marketed by the Company [hereinafter referred to as Spare Parts ] [the expressions Vehicle and Spare Parts are hereafter collectively referred to as Product ] and to provide After Sales Services and various Value Added Services to the customers [hereinafter collectively referred to as Services ]. 3 (e) It is expressly agreed and declared that notwithstanding anything herein contained, this Agreement does not constitute any form of agency or principal-agent relationship between the Dealer and the Company. The Dealer and the Company shall deal solely on a principal to principal basis in the manner provided in this Agreement. 3 (f) Nothing contained in this Agreement shall in any way operate by implication or otherwise to constitute the Dealer as an agent of the Company in any respect and for any purpose whatsoever, and it shall be absolutely unauthorized for the Dealer to represent himself as an agent of the Company or to assume or to create any obligation of any kind, expressed or implied, on behalf of the Company or bind the Company in any respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand on the incentives received by the appellant from Tata Motors for meeting sales targets. It is undisputed that the agreement is titled dealership agreement and that it also clarifies that the appellant has to purchase vehicles from Tata Motors and then sell them. If it meets the targets it gets additional incentives. This in our considered view, is in the form of a trade discount. Trade discount can take many forms, such as, cash discount, quantity discount, year end discount, etc. These incentives are in the form of year end discount. This is an incentive given to encourage the dealer to buy and sell larger number of vehicles. It is not a payment for any service rendered to the manufacturer. In market, buyers who purchase larger quantities of any good often get a better price. The incentives in this case are of this nature. It has already been held by this Tribunal in the case of Sai Service Station Ltd. and Rohan Motors Ltd., that such incentives are not exigible to service tax. Paragraph 2,3,14 and 22 of the order of Rohan Motors Ltd. are reproduced below:- 2. The appellant is a dealer of Maruti Udhyog Ltd.. The appellant buys vehicles from MUL for further sale to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Rs. 23,43,19,543/- on which service tax has been demanded, no service tax can be charged on Rs. 17,17,75,363/- and service tax has already been declared and paid on Rs. 2,33,48,828/-. Of the remaining Rs. 3,91,95,353/- part of the demand has already been dropped as the receipts were of prior to 2012. For the period 2012 to 2013 part of the services were rendered between 01.04.2012 to 30.06.2012 which are not taxable, but services post 01.07.2012 were taxable. However, the demand was confirmed for the entire year as the breakup of the receipts between 01.04.2012 to 30.06.2012 and the period from 01.07.2012 to 31.03.2013 were not available. These figures have now been presented before us by the learned Consultant. According to the learned Consultant on the basis of these figures a demand of Rs. 15,44,404/- as service tax deserves to be dropped. As the Commissioner had no opportunity to examine these figures and the relevant documents we find that it is a fit case to be remanded to the Commissioner for verification of these figures. 17. Considering all the above, we do not find that there is any mis-declaration in the VCES declaration made by the appellant. We find that :- ..... X X X X Extracts X X X X X X X X Extracts X X X X
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