9911796707
TMI Blog2024 (6) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... cific reasons - thus, no ground for denial of credit is established on any invoice, CENVAT credit cannot be denied. Booking Cancellation Charges - HELD THAT:- The booking cancellation charges being in the nature of damages are not a consideration for the contract. Section 66E(e) of the Act covers such cases where an agreement is entered into to refrain from an act or to tolerate an act, i.e. where the consideration is to refrain from an act. Here, there is no agreement to cancel the booking. The agreement is to book the car and subsequently buy it. By cancellation, the buyer goes back on his promise to buy the car and the cancellation charges are in the form of compensation - the demand of service on the amounts received on this account needs to be set aside. Price difference Corporate Discount - HELD THAT:- It is a well settled legal principle that any amount received by an automobile dealer from the manufacturer as trade discount including quantity discount (which is a trade discount given on the basis of volume of purchase) are not amounts received for providing any taxable service but purely discounts received on account of the trade and meeting certain sales targets. Such amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment for providing various services and has been paying service tax and filing returns as required. Its accounts for the Period from April, 2011 to March, 2015 were examined by the department and the figures indicated in their ST-3 returns were compared with its balance sheets and copies of Forms 26-AS. After analyzing the data, the department came to the tentative conclusion that the appellant had not paid service tax on the total value of services provided by it. 2. Accordingly, a show cause notice [SCN] dated 12.12.2016 was issued by the Commissioner of service tax, Delhi III to the appellant demanding differential service tax or Rs. 43,78,435/- under Section 73 (1) of the Finance Act, 1994 [Finance Act ] invoking extended period of limitation. Interest was demanded on this amount under section 75 of the Finance Act and a penalty of an equal amount equal to service tax demanded was proposed to be imposed under section 78. In the SCN it was also proposed to deny CENVAT credit of Rs. 1,28,80,013/- to the appellant and recover the same under rule 14 of the CENVAT Credit Rules, 2004 [CCR] along with interest and impose penalty of equal amount under rule 15(3) of CCR read with secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant was unable to provide them at that time and, therefore, the entire CENVAT credit availed during the entire period was sought to be denied in the SCN the details of which are as follows: FY Paid by CENVAT credit 2011-12 1,00,699 2012-13 32,96,154 2013-14 68,09,927 2014-15 55,12,879 Grand Total 1,57,19,659 6. According to the learned chartered accountant the appellant had provided copies of invoices and documents to the Commissioner during personal hearing but the Commissioner had not considered them while passing the impugned order denying the CENVAT credit has been denied and proposed to be recovered. 7. We have gone through the impugned order and at page 53 of the order the Commissioner recorded as under: However, at the time of personal hearing, they have submitted copies of bills/invoices against which they have availed CENVAT credit for going through the copy of bills/ invoices it is noticed that the assesse has submitted in discharge copies of bills for value. Further, in some bills/ invoices it was noticed that figures of the bills/ invoices does not match the figures provided in details on the basis of which credit has been taken, name, address and service tax reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n act. Therefore, the Commissioner confirmed a demand on the amounts received on this account. Learned Chartered Accountant submits that the confirmation of demand in this head is not correct because section 66E(e) was not invoked in the SCN and the Commissioner could not have gone beyond the scope of SCN. He also submits that this section had not existed prior to 01.07.2012 and, therefore, demand could not have been confirmed at any head for the period April, 2011 to June, 2012. For the period after 01.07.2012, the appellant submits that any compensation received for reneging from a contract can only be considered as damages. Such amounts, being in the nature of compensation and not a consideration for service, no service tax could be charged on them. He relies on the following case laws: (i) South Eastern Coalfields Limited vs. Commissioner of C. Ex. ST., Raipur. [ 2021 (55) GSTL 549 (Tri-Del.)] (ii) Krishnapatnam Port. Vo. Ltd. vs. Commissioner of C. Ex. ST, Guntur [ 2023 (72) GSTL 259 (Tri.-Hyd)] (iii) Madhya Pradesh Poorva Kshetra Vidyut Vitran Co. Limited vs. Commissioner of CGST Central Excsie, Jabalpur [ 2022 (67) GSTL 86 (Tri.-Del.)] 11. We have considered the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner during the hearing. A certificate from the CA dated 17.06.2019 was also provided along with undertaking by the DGM Finance of manufacturer that the amounts given to the appellant are the discount or incentive based on the quantity purchased by the appellant. However, the Commissioner confirmed the demand on this amount. Learned CA submits that incentives received from manufacturers of automobile are trade discount and not exigible to service tax relies on the following case law: (i) Rohan Motors Ltd. vs. Commissioner of Central Excise, Dehradun [ 2021 (45) GSTL 315 (Tri.-Del.)] (ii) Prem Motors Pvt Ltd. vs. Commissioner of C. Ex CGST, Jaipur [ 2023 (73) GSTL 97 (Tri.-Del.)]. 13. We have considered the submissions on both sides regarding the amounts received under this head. It is a well settled legal principle that any amount received by an automobile dealer from the manufacturer as trade discount including quantity discount (which is a trade discount given on the basis of volume of purchase) are not amounts received for providing any taxable service but purely discounts received on account of the trade and meeting certain sales targets. Such amounts cannot be charged to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for such service. If any part of the car needed to be changed during such service they bill the customer for zero rupees. The cost of said parts is reimbursed by the manufacturer of the vehicle to the appellant because it was under warranty. The amounts which the appellant had received towards the cost of such parts were accounted for as warranty claim (parts). 19. We have considered these submissions and find that no service tax could have been demanded on the value of spare parts received by the appellant from manufacturer as it was only a sort of reimbursement of the cost incurred by the appellant while servicing the cars during warranty service. The demand on this account needs to be set aside. Procurement charges (Volume Discount-Paint) 20. Learned chartered accountant submits that the appellant consumes large amount of paints in servicing cars in its denting and painting jobs. The manufacturers of paints offer the appellant volume discount if it purchases large quantity of paints in a year. The amounts so received have been credited by the appellant as procurement charges (volume discount-paints). Clearly, no service tax could have been charged on this volume discount which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
