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TMI Blog2024 (10) TMI 901X X X X Extracts X X X X X X X X Extracts X X X X ..... uently no service tax is payable. Even for the period post negative list regime in the Finance Act, 1944, the sale of goods by way of transfer of title of goods is excluded from the service. The Division bench of this Tribunal dealing with the identical issue in the case of INFINIUM MOTORS GUJ PVT LTD VERSUS C.S.T. -SERVICE TAX - AHMEDABAD [ 2022 (11) TMI 948 - CESTAT AHMEDABAD] held that ' it is not in dispute about the transaction even in the present case being identical and sales incentive given by M/s Toyota Kirloskar Motors Pvt Ltd to the appellant is nothing but in connection with purchase and sale of the vehicles. Hence, the same can not be considered as commission against any service by any stretch of imagination. ' - Thus, it is settled that the trade incentive/ discount is not liable to service tax. Thus, in the present case, the amount of trade discount is not liable to service tax. Hence, the impugned order is set aside, the appeal is allowed. - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. C L MAHAR Shri Amber Kumrawat , Advocate , appeared for the Appellant Shri Rajesh R Kurup , Superintendent ( AR ) appeared fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erits as well as limitation were discarded by the Ld. Adjudicating Authority vide the following findings : - That the assessees have received incentives in respect of promoting or marketing the sale of vehicles or business of TML under various incentive schemes. The activity performed by the assessees for which they received incentives, the act of performing a specific activity or achieving a specified target, achieving a target for network development and the activity of sales promotion, marketing of sales of goods of client is covered under the definition of service. The incentives/commissioner are excludible from the taxable value of service only when such expenses are paid to the third party and service provider is actually working as a pure agent. However, in the instant case said incentives / commissions are kept by the assessees and not passed on, as no documentary evidence in this regard had been produced. 1.5 The Appellants being aggrieved by the aforesaid orders confirming demand of service tax had challenged the same in appeal before Ld. Commissioner (Appeals). However, the Ld. Commissioner (Appeals) had also confirmed the demands and dismissed the appeal filed by the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he value of goods supplied by TML, wherein the nexus of incentive is with goods purchased by the Appellant and not with any activity undertaken by the Appellant for TML. 2.3 To appreciate the above submission, it is imperative to refer to the applicable law, as envisaged by the legislature, and as interpreted by the judiciary. 2.4 The regime of Service Tax as introduced initially in 1994, was a classification- based taxation regime. This meant that Service Tax was only required to be paid in a case where the services provided were classifiable under a category enumerated under the Finance Act. However, the Finance Bill 2012, w.e.f. 01.07.2012, introduced a new system of taxation of services, popularly known as Negative List Regime . Thenew changes were a paradigm shift from the system existed hitherto. Under the old system, only services of specified descriptions were subjected to the levy of tax. In thenew system, all services, regardless of nomenclature or description, became taxable except for a small set of services falling under the Negative List . Under the new regime, Section 66B of the Finance Act (as amended) is the charging section . As per Section 66B, Service Tax at pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power to impose tax on sale of goods, whether by mere transfer of title or by way of deemed sale, has been reposed in the states. The relevant exclusion from the definition of service is reproduced as under: a. A transfer of title in goods or immovable property, by way of sale, gift or in any other manner. 2.6 It is evident from the above that the activity of transfer of title in goods or immovable property in any manner has been excluded from the definition of service . Thus, the value attributable to transfer of title in goods in any manner shall not be chargeable to Service Tax, as the activity, towards which the same is paid, shall not qualify as a service . 2.7 In the above background, it is reiterated that the subject incentives/discounts received by the Appellant from TML cannot be said to be a consideration for any service allegedly rendered by the Appellant as there is no nexus between the impugned activities allegedly carried out by the Appellant and the alleged consideration received in the form of discount or incentive from TML. Moreover, only because the quantification of discounts along with its provisioning thereof happened subsequently, the same cannot be a val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... New Delhi Rohan Motors Limited vs. Commissioner of Central Excise, 2020 (12) TMI 1014 - CESTAT New Delhi Anand Motor Agencies Ltd. vs. Commissioner of Customs, 2022 (2) TMI 546 - CESTATAllahabad M/s GD Goenka Pvt. Ltd. V. Commissioner of CGST, Delhi South, 2023-VIL-798-CESTAT-DEL-ST M/s. Krishi Upan Mandi Samiti v. CCE ST, Jaipur I Jaipur II, 2017 (5) TMI 1465- CESTAT NEW DELHI M/s. Airport Authority of India v. CST, Delhi, 2017 (3) TMI 938- CESTAT NEW DELHI. Infinium Motors Gujarat Pvt. Ltd, v. CST, Ahmedabad 2022 (11) TMI 948-CESTAT AHMEDABAD M/s. Prem Motors Pvt. Ltd. v. CCE CGST, Jaipur 2023 (2) TMI 990- CESTAT NEW DELHI Reliable Automotive Pvt. Ltd. v. CGST CE, Mumbai 2024 (4) TMI 66- CESTAT-Mum BM Autolink v. CCE- Kutch (Gandhidham) 2022 (12) TMI 12 - CESTAT AHMEDABAD M/s. Roshan Motors Pvt. Ltd. v. CCE, Customs CGST, Jaipur 2022 (8) TMI 1254 - CESTAT NEW DELHI M/s Rohan Motors Ltd. v CCE, Dehradun 2020 (12) TMI 1014-CESTAT NEW DELHI M/s. Rohan Motors Ltd. v CCE, Meerut-I 2018 (7) TMI 29-CESTAT NEW DELHI Escape v. CST- Ahmedabad 2023 (11) TMI 13-CESTAT AHMEDABAD International Travel House Ltd. v. CCE ST, Vadodara- 1 2023 (6) TMI 994-CESTAT AHMEDABAD M/s. Anand Motors Agency ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case of sale of goods, for this reason, the activity of transfer of a title in the goods by way of sale is excluded from the purview of the service tax. Therefore, the taxing on sale of goods is within the jurisdiction of the State as per the Constitution on which State VAT is payable. Therefore, the trade discount/ incentive given by the car manufacturer M/s. TATA Motors Ltd in the present case to the appellant is during the course of sale of goods. Hence, the same is not leviable to service tax. This issue has been considered in the following judgment:- a) The Division bench of this Tribunal dealing with the identical issue in the case of Infinium Motors Gujarat Pvt. Ltd (supra) held as under:- 5.3 The second issue is that the Adjudicating Authority confirmed the demand of Service Tax on sales incentives given by M/s. Toyota Kirloskar Motors Pvt Ltd. to the appellant in connection with sale of their vehicles to the appellant which were subsequently sold by the appellant to their customers. In this regard to arrive at the conclusion whether the incentive given by the seller of vehicle M/s. Toyota Kirloskar Motors Pvt Ltd. to the appellant being a purchaser of the vehicle what i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax on sales incentives if the appellant proves that incentive / discount was received for trading or buying and selling. The Commissioner (Appeals) held that the appellant had purchased the cars from M/s. Toyota Kirloskar Motor Pvt. Ltd. on their own account on payment of VAT and sold to the clients on payment of VAT. The Commissioner (Appeals) also held that the transaction was principal to principal basis and the service tax was not payable under the category of BAS. From the above, it is not in dispute about the transaction even in the present case being identical and sales incentive given by M/s Toyota Kirloskar Motors Pvt Ltd to the appellant is nothing but in connection with purchase and sale of the vehicles. Hence, the same can not be considered as commission against any service by any stretch of imagination. This issue has been considered time and again and it was held as under : CST, Mumbai l V/s. Sai Service Station Ltd. 2014 (35)STR 625 (Tri.- Mum.) 18. In respect of sales/target incentive, the Revenue wants to tax this activity under the category of business auxiliary service. We have gone through the circular issued by MUL which provides certain incentives in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thing extra over and above the said price. The Manufacturers shall not be responsible for any loss of goods after it leaves the factory premises. Wholesale Distributor would be the owner of the goods once same are supplied to them by the manufacturer from the factory gate and the Wholesale Distributor shall take possession of the goods from the factory gate and shall transport the same to its godowns at its own expenses. It is observed from the above para that after supply of goods by the manufacturer the ownership of goods is transferred to the wholesale distributor who is the appellant here. The sales invoice raised by the manufacturer is scanned below : From the agreement coupled with the above invoice it can be seen that the transaction between the manufacturer M/s. Gunaji and the appellant is clearly of sale. In the invoice the manufacturer has charged 20% VAT the transaction is clearly at arms length hence sale transaction on principal to principal basis. From the invoice, it is also observed that a trade discount was passed on by the manufacturer to the appellant. As per this undisputed fact once, the transaction is of sale there is no relationship of service provider and se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the period from 2007-08 to 2012-13. As per provision of Cenvat Credit Rule 6 it has application in case the assessee is providing taxable and exempted service. The trading activity in respect of which the demand was raised under Rule 6(3) under a fiction of law made exempted service only with effect from 01.04.2011 by insertion of explanation under Rule 2(e) by notification No. 3/2011-CE(NT) dated 01.03.2011. In view of this amendment it is clear that the trading activity was not defined as exempted service prior to 01.04.2011. Therefore, the trading activity not being an exempted service during period 2007 to 2011, Rule 6(3) cannot be made applicable during such period. It is a settled law that any statutory amendment cannot be made applicable retrospectively unless the effect of retrospective is enacted by the parliament. Therefore, trading being exempted service is effective only from 01.04.2011. Hence, the demand under Rule 6(3) on trading activity for the period 2007-08 to 2010-11 is wholly illegal and without any support of law. This very issue has been considered by this Tribunal in the following judgments: CCE, Bhopal V/s. My Car (Bhopal) P. Ltd.- 2019 (22) GSTL 273 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , during the disputed period, the taxable service of authorized service station. They also carried out, from the same premises, the activity of trading of four wheelers. They have availed Cenvat credit of various input services which the Department has claimed has been utilized both for the taxable service as well as trading. The stand taken by the Department is that the activity of trading is to be considered as exempted service even though such activity has been specifically inserted as an exempted service only w.e.f. 1-4-2011 vide Notification No. 13/2011-C.E. (N.T.). 6. Both the authorities below have taken the clear stand that the activity of trading has come under the category of exempted service only w.e.f. 1- 4-2011 and the said amendment carried out to Cenvat Credit Rules cannot be considered as having any retrospective effect. Therefore, we find no reason to interfere with the impugned order. The appeal is accordingly dismissed. Marudhan Motors V/s. CCE, Jaipur-ll 2017 (47) STR 261 (Tri.-Del.) The issue involved in this appeal for consideration by the Tribunal, is as to whether, during the period 2005-2006 to 2009-2010, trading should be considered as exempted service und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The present two appeals are arising out of same impugned Order-in- Appeal No. GZB-EXCUS-000-APP-11-14-15, dated 28- 4-2014. Therefore, they are taken together for decision. Appeal No. E/54591/2014 is filed by M/s. Avon International Pvt. Ltd. and Appeal No. E/53649/2014 is filed by Commissioner of Central Excise, Ghaziabad. M/s. Avon International Pvt. Ltd. have submitted compliance to interim order No. 05/2016, dated 27-1- 2016. 2. The brief facts of the case are that appellant-manufacturer was issued with show cause notice dated 28-3-2013 wherein there was allegation that during the period from April, 2010 to March, 2011 they have cleared raw materials such as plastic granules re-processed, Calcium/Mineral powder fabric and Glass on which they did not avail Cenvat credit and sold them and it appeared to Revenue that such activity was trading and therefore since Cenvat credit of Service Tax paid on inputs services had gone into activity of manufacturer as well as abovestated trading, there was demand of amount of Rs. 2,12,569/- under Rule 6(3) of Cenvat Credit Rules, 2004. The appellant-manufacturer contended that trading was treated as exempted service through Notification No. 3/ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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