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TMI Blog2023 (5) TMI 1154X X X X Extracts X X X X X X X X Extracts X X X X ..... manufactures namely M/s. TATA Motors. While discharging service tax, the appellant paid service tax only on the labour charges portion and did not include the cost of materials/spares which was reimbursed by M/s. TATA Motors. The Department was of the view that the appellant has to include the cost of the spares/materials used for providing the free services. Show cause notice was issued proposing to demand service tax along with interest and also for imposing penalties. After due process of law, the original authority confirmed the demand along with interest and imposed penalty under Section 78 of the Finance Act, 1944. Aggrieved by such order the appellant preferred an appeal before the Commissioner (Appeals) who vide order impugned herei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he manufacturer towards supply of parts and accessories used during the free warranty service alleging that the spares/parts are inputs and these are consumed while providing services. During free services the appellant provides the spares and accessories free of cost to the customer which is later reimbursed by the manufacturer. Being reimbursable expenses the same cannot be subjected to levy of service tax. 3. It is submitted by the learned counsel that the issue is covered by the decision of the Tribunal in the appellant's own case for the subsequent period vide Final Order No.40394-394/2019. The Tribunal in the said decision had followed the decision of the Tribunal in the case of M/s. ABT Ltd. and others Vs. Commissioner of Central Ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... included in the value for the purpose of charging service tax on the said notification". This Rule was under consideration before the Hon'ble Supreme Court in the case of Union of India Vs Intercontinental Consultants and Technocrats Pvt. Ltd. 2018 (10) GSTL-401 (SC) and it was held that reimbursable expenses cannot be included in the taxable value. The period involved is prior to the amendment of Section 67 of the Finance Act, 1994. The very same issue as to whether the cost of spares and material used for free services during warranty period has to be included in the taxable value or not was considered by the Tribunal in the case of M/s. ABT Ltd. and others Vs. Commissioner of Central Excise, Coimbatore vide Final Order No.40618-40628/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were also considered as reimbursement of the cost of spares used in rendering the extended warranty premium in respect of M/s. ABT Ltd. The service tax demands stand challenged before us in the present appeals. 3. With the above background, we have heard Shri S. Durairaj representing all the appellants. He submitted that the cost of spares used during the warranty and extended warranty is no doubt reimbursed to the dealers. However, such spares are sold by these dealers on payment of VAT and hence there is no justification to include such amounts for payment of service tax. In addition, he submitted that the extended warranty premium recovered by the authorized dealers have been remitted to the manufacturers of motor vehicles and on such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0) GSTL 401 (SC) and also submits that the very same issue has been decided by this Bench vide Final Order Nos. 40618 to 40628/2018dated 14.3.2018 in the case of ABT Ltd. Vs. Ors. Vs. Commissioner of Central Excise, Coimbatore wherein the issue has been decided in favour of the appellants therein. 2. On the other hand Ld. AR Shri B. Balamurugan supported the findings in the impugned order. 3. After hearing both sides, we find that the ld. counsel is correct in his assertion. The matter is indeed covered not only by the ratio of the Apex Court in Intercontinental Consultants and Technocrats Pvt. Ltd. (supra) but also by the decision of this Tribunal in the case cited above. In view thereof, we find favour with the appellant. The impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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