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TMI Blog2024 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... is not sustainable. This view has been held by the Tribunal Hyderabad in the case of SYNIVERSE MOBILE SOLUTIONS PVT LTD., (EARLIER TRANSCIBERNET INDIA PVT LTD.) VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, HYDERABAD IV [ 2023 (6) TMI 463 - CESTAT HYDERABAD ], wherein it has been observed The impugned order, therefore, can be set aside only on this ground as the show cause notice does not mention which service out of the seven services specified in Section 65(19) of the Act was undertaken by the Appellant - by relying on the decision cited, it is held that in the absence of a specific sub-section of Section 65(19) of the Finance Act, 1994 under which the service tax has been demanded, the demand of service tax under the category of 'Business Auxiliary Service' is not sustainable and accordingly, the same is set aside. Demand of service tax confirmed under the category of 'Authorized Service Station' - HELD THAT:- Since TML covers the expenses for after-sale services, which are already included in the assessable value for excise duty, no service tax is payable on the reimbursements received by the Appellant from TML. With regard to the reimbursement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TML provided the details of warranty, commission, incentive etc. paid by them to the appellant. On the basis of the details provided by TML, agreements entered into between TML and the Appellant and ST-3 returns filed by the Appellant for the period from April 2009 to September 2012, the Department alleged that the Appellant has not paid appropriate service tax on the amount received as 'commission' on vehicle sale, sales promotion and incentive which fall under the category of 'Business Auxiliary Services'. It was also alleged that the Appellant had not paid service tax on the amount of reimbursements received by them towards free service and warranty, under the category of 'Authorized Service Station Service'. 2.1. Accordingly, a Show Cause Notice dated 24.10.2013 was issued to the appellant demanding service tax of Rs.91,28,574/-, Education Cess of Rs.1,82,572/- and Secondary and Education Cess of Rs.91,286/- along with interest and penalty. The appellant has contested the demands vide their reply dated 03.12.2013, on merits as well as on limitation. The Ld. Commissioner has passed the impugned Order-In-Original dated 28.11.2014 confirming the demand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... constitutes reimbursement for actual spares and labour cost and not a consideration subject to service tax. It is further submitted in this regard that it is the obligation of TML to provide certain after-sale services at no cost to customers, with the associated expenses reimbursed to the Appellant; therefore, as TML bears these expenses and incorporates them into the assessable value of their vehicles, subject to excise duty, imposing service tax on these amounts would essentially result in double taxation; since TML covers the expenses for after-sale services, which are already included in the assessable value for excise duty, thus negating the basis for their inclusion in taxable value for service tax purposes. With regard to the reimbursement of labour, the Appellant submits that the same has become taxable with effect from 01.07.2012, from which date applicable service tax has been discharged by them. 4.1. The Appellant further submits that the issue is no longer res integra since the Hon ble Supreme Court has already decided this issue by stating that that until May 14, 2015, reimbursable expenditure or cost in consideration for services were not included prior to the amendm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm practice of the entire industry including the Appellant; therefore, to state that only in the course of audit the information came to light, is absolutely incorrect. Hence, it is contended that the allegation of suppression in this regard is unsustainable. 5.1. The Appellant relies on the following decisions in support of their contention that when an assessee was under a bona fide belief, then extended period of limitation is not invokable: CCE v. Vineet Electrical Industries Pvt. Ltd. [2002 (144) ELT 292 (SC)] CCE v. Raptakos Brett Co. [2006 (194) ELT 101 (Tri.- Mum.)] M/s Wave Infratech Pvt. Ltd. vs. Comm. of C. Ex. S.T., Lucknow [2018-TIOL-3107-CESTAT-ALL] 5.2. In view of the above, the appellant submitted that the demand under the head of Business Auxiliary Service to the extent of Rs.38,43,373/- and under the head of Authorized Service Station Services to the extent of Rs.6,93,796/- is liable to be set aside as being time barred. 6. The Ld. Authorized Representative appearing for the Revenue reiterated the findings in the impugned order. 7. Heard both sides and perused the appeal documents. 8. We observe that the impugned order has confirmed the demand of service tax amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e lower authorities as without specifying the activity and the nature of service of the respondent he cannot be taxed. Further out of the seven clauses under Section 65(19) no clause has been pointed out under which the respondent is liable for service tax.[emphasis supplied] In the case of United Telecom Ltd., Vs CST, Hyderabad [2011 (22) STR 571 (Tri-Ban)] the Bench has held as follows: 2.3 In the impugned order, the Commissioner (Appeals) observed that the Original Authority himself was not clear under which category of service the activity of the appellants was liable Service tax. The Commissioner (Appeals) reproduced Section 65A(2), the statutory provision for classification of a taxable service prima facie classifiable under two or more sub-clauses of Clause 105 of Section 65 and observed as follows:- The lower authority has obviously not followed principles detailed supra and clearly erred in holding that the services rendered by the appellants are classifiable under both Business Auxiliary Service as well as Business Support Service . Having reproduced the findings of the Commissioner in the impugned order and having observed that I am in agreement with the aforesaid findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them on the reimbursement of labour. 10.1. We also observe that the issue is no longer res integra since the Hon ble Supreme Court has already decided this issue by stating that that until May 14, 2015, reimbursable expenditure or cost in consideration for services were not included prior to the amendment of Section 67 of the Finance Act, 2015. Therefore, in the absence of such charging section, no service tax can be charged on the reimbursements received by the appellant. We find that this proposition has been laid down by the Hon ble Supreme Court in Union of India v. Intercontinental Consultants Technocrats Pvt. Ltd. reported in 2018 (10) GSTL 401 (SC). The relevant paragraph of the said judgement is reproduced below: - 31. In the aforesaid appeals, the issue is as to whether the value of free supplies of diesel and explosives in respect of the service of Site Formation and Clearance Service can be included for the purpose of assessment to service tax under Section 67 of the Act. These assessees had not availed the benefit of aforesaid Notifications Nos. 15/2004 and 4/2005. Therefore, the issue has to be adjudged simply by referring to Section 67 of the Act. We have already held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise, Pondicherry [2024 (4) TMI 532 - CESTAT CHENNAI] wherein it has been held as under: 7. The main contention put forward by the appellant is that the show cause notice does not mention the category of service under which the demand is raised. On perusal of the show cause notice as well as the order-in-original, we note that the category of service has not been mentioned at all. It is merely stated that from the statements recorded from persons of M/s Neyveli Lignite Corporation, various services in the nature of Management, Maintenance or Repair Services, Manpower supply Agency Services and Commercial or Industrial Construction Services have been provided by the appellant. On perusal of the annexure to the show cause notice, it is seen that there is nothing mentioned as to the category of service. The annexure merely states the description of work done in the invoices. The adjudicating authority, while confirming the demand, has not made any discussion as to what is the amount that would fall under each category of service or whether the entire amount falls within one category of service. 8. The Hon ble Supreme Court in the case of Commissioner of Central Excise, Vs. M ..... X X X X Extracts X X X X X X X X Extracts X X X X
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