2008 (9) TMI 83

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..... om the service recipient – demand and penalty not sustainable
Justice S.N. Jha, President and Shri M. Veeraiyan, Member (Technical) (Final Order Nos. 257-260/2008-ST dt. 4.9.2008 certified on 29.9.2008 in Appeal Nos. ST/124, 125, 439 & 440/2007) Shri Atul Gupta. C.S. for Appellant. Shri A.K. Madan DR for Respondent. [Order per M. Veeraiyan, Member (Technical)] - Appeal ST Nos 124-125/ 2007 are against the order of the Commissioner (Appeals) bearing No.105-106/GR/ST/JPR.I/06 dated 28.11.2006. 1.2 Appeal ST Nos. 439-440/2006 are appeals against the order of the Commissioner bearing No.23 & 21/2007 dated 15.5.2006 by which he imposed penalty under Section 78 of the Finance Act. 1.3 All these appeals are connected and involve common i .....

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..... of the Original authority. (e) The Commissioner in revision proceedings, after issue of notice, imposed penalty under Section 78 as well. 4.1 The learned Authorised Representative of the appellant, submits that they are rendering free services and no service charges are being received from the recipients of service; it is wrongly presumed that they are being reimbursed by M/s Hyundai Motors for the services rendered free to the customers; free services are being rendered out of margins provided to them; cost of free services also get included in the assessable value for the purpose of paying excise duty and sales tax. 4.2 The learned Representative relied on the following judgements:- CCE, Bombay Vs Eastern Aeromatics (P) Ltd. - 1998 (2 .....

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..... The learned DR is not able to produce any evidence contrary to this. Show cause notice has also gone on the, presumption that one of the methods of re-imbursement is to include the said service charges in dealer' margin. In other words, we find that in this case, the service provider has not received any service charge from the service recipient. We have also not been shown that the vehicle manufacturers have specifically reimbursed any amounts towards the said services. In these circumstances, payment of service tax and imposition of penalty under various sections are not sustainable. 7. In view of the above, all the appeals are allowed with consequential relief, if any, as per law. (Order dictated and pronounced in the open Court.)
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