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TMI Blog2024 (8) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... er to buy and sell larger number of vehicles. It is not a payment for any service rendered to the manufacturer. In the present case, under the contract of sales, since the specific targets for specific quantum of sale of cars of the manufactures that the dealer is agreed to have received some amount as incentive/discount, such amounts are not towards rendering Business Auxiliary Services but the incentives are only trade discounts which are extended to the appellant for achieving the required targets. The activity of receiving the incentives/discounts is as good as a part of trading activity and cannot be called as service as is defined under Section 65B(44) of the Finance Act. The findings of the original adjudicating authority since are contrary to the earlier decisions on the same issue, those are liable to be set aside. Extended period of limitation - HELD THAT:- The show cause notice must contain an averment to that effect pointing out specifically as to which of the various acts or omissions stated in the act have been committed/not committed by the assessee and the adjudicating authority must specifically deal with assessee s contention in rebuttal thereof. In the present ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the circulars issued by the manufacturer from time to time. Thus, the discount/incentive/commission in the following form were being earned by the appellants from M/s. TML: (i) Discount received for vehicle and parts from TML. (ii) Incentive received for Target Achievement from TML. (iii) Discount/Incentive received for TATA Business Support from TML. (iv) Discount/Incentive received from AMC from TML. (v) Commission received for insurance from TML. (vi) Commission received for finance from Tata Motors Finance Limited. (vii) Scheme Discount received for lubricant from Castrol. (viii) Scheme discount received for lubricant from Indian Oil. 1.2 Following are the amounts received: S. No. Period Commission received from finance /insurance companies Discount received from M/s TML Scheme Discount received Form lubricant companies Other income like interest/ prof it on sale of fixed assets Total service receipts of M/s. DAPL 1 2 3 4 5 6 7(3+4+5+6) 1 FY 2014-15 (Oct 14 to March 15) 0 5,49,12,795 12,45,345 4,41,700 5,65,99,840 2 FY 2015-16 54,896 6,25,27,707 6,52,478 2,91,837 6,35,26,918 3 FY 2016-17 95,752 17,88,97,279 12,97,141 16,360 18,03,06,532 4 April 17 to June 17 19,658 3,60,78 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmation of the impugned demand is contrary to the said findings. It is finally submitted that show cause notice is bad in law, it being barred by limitation. There is nothing on record to show suppression on part of the appellant with an intent to evade payment of tax regarding discount/incentive received by them from M/s. TML. It is mentioned that show cause notice has wrongly invoked the extended period of limitation. With these submissions, learned counsel has prayed for the appeal to be allowed. 4. While rebutting these submissions, learned Departmental Representative has mentioned that the incentives/discounts/reimbursements as were received by the appellant were for achieving certain purchase as well as the sales target specified by M/s. TML and other lubricant companies. Therefore these were conditional and contingent upon appellant achieving such specified targets. Hence, these amounts have rightly been held as an amount of consideration received for doing the act of achieving a target specified by M/s. TML and others. The amount is rightly held taxable in view of the provisions of Section 65B of Finance Act, 1994. With respect to invocation of extended period, it is men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces as independent entity and nothing contained herein shall be deemed to create any partnership, joint venture between the Parties or a merger of their assets or their fiscal or other liabilities or undertakings or create any employment or relationship of principal and agent between the Company and Dealer and/or its representatives, employees and agents. Clause C sub-clause (l) reads as follows: 3(l) 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 whatsoever in relation to a third party. 5.3 The perusal of these clauses makes it clear that the agreement between the two is for selling various vehicles and the respective spare parts. The apparent subject matter of the agreement therefore is sale where appellant has agreed to sell the vehicles/spare parts manufactured by M/s. TML. Clause 3(h) and 3(l) clarifies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... find no infirmity in the adjudication order whereby the adjudicating authority dropped the demand. Hence, the appeal filed by the Revenue has no merit. 5.5 This Tribunal in its recent decision in the case of M/s. Rohan Motors Ltd. Vs. Commissioner of Central Excise, Dehradun reported as 2021 (45) GSTL 315 (Tri-Del.) while relying upon the earlier decision of the Tribunal in M/s. Rohan Motors Ltd. itself has held that when a discount is received by the dealer under a dealership agreement referring it to as incentive under relevant schemes agreeing for the dealer to work on principle to principle basis instead of being agent of the manufacturer. The incentives received cannot be treated as consideration for any service and cannot be leviable to service tax as these are received against undertaking certain sale promotion activities by the dealer for the mutual benefit of the business of the dealer as well as the vehicle manufacturer. Since these decisions are squarely applicable to the facts of the present case and hold that no service tax can be demanded on the incentive which was in the form of trade discounts extended to the dealer in terms of a declared policy for achieving sales ..... X X X X Extracts X X X X X X X X Extracts X X X X
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