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TMI Blog2025 (1) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... MI 1178 - CESTAT AHMEDABAD] it can be seen that the issue in hand is squarely covered by the decision. Therefore the handling charges is not liable to service tax. In the present case there is no dispute from the VAT department that the handling charges whether is liable to VAT or otherwise. Since the appellant has charged the VAT on handling charges and the same attained finality as there is no record whether the charging of VAT is incorrect the handling charges in the fact of the present case cannot be charged to service tax. Conclusion - The handling charges included in the sale invoice of the car, on which VAT was paid, are not liable for service tax. The impugned order is set aside. Appeal is allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C. L. MAHAR, MEMBER (TECHNICAL) Shri Anurag Basu, Chartered Accountant for the Appellant Shri Girish Nair, Assistant Commissioner (AR) for the Respondent ORDER The issue involved in the present case is that whether the appellant being a car dealer collecting handling charges in their sale bill of selling of car to individual customer is liable for payment of service tax on such handling charges or otherwise. 2. Shri Anurag Basu learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 2 (25) of the motor vehicle act. He submits that on these issues the Hon'ble High Court has held that the handling charges is not a part of sale price of the car vehicle and therefore the same is not liable for VAT. It is clear that since the handling charges is not a part of the sale price of the vehicle then the same will be independent service charges and liable to service tax, therefore he submits that the service tax was rightly demanded on handling charges, therefore the same needs to be upheld by dismissing the assesee's appeal. 4. We have carefully considered the submissions made by both the sides and perused records we find that in the facts of the present case there is no dispute that the handling charges is shown in the sale bill of the car and on the total elements that is sale price of the car, handling charges and other charges, the appellant have calculated the VAT at the rate of 12.5%+2.5% and the total bill value was collected from the customer of the car, Therefore the total bill value is a sale value of the car and the handling charges is part of the sale price on which the VAT has been paid. Therefore the handling charges being the part of the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e liable to service tax as the same was suffered VAT. In this regard the following judgments are reproduced:- (a) In Ketan Motors Limited the Tribunal held as under:- 5. We have carefully considered the rival submissions. As the issue lies in a narrow compass, after dispensing with requirement of predeposit, we take up the appeal itself for consideration. 5.1 In para 3.2 of the impugned order it is started that the appellant had furnished the following information and documents vide letter dated 21-9-2011: (i) Year wise details of value of spare parts used during the course of servicing of motor vehicle for the period 2006-07 to 2010-11: (ii) Copy of Balance Sheet, Profit Loss Accountant for the year 2006- 07 to 2009-10; and (iii) Copy of ST-3 returns for the period 2006-07 to 2010-11. 5.2 However, while confirming the demand, the learned Commissioner has taken the value of sale of spare parts as reflected in the balance sheets. This is incorrect. If a transaction involves only sale of spare parts, the question of levying service tax would not arise at all and therefore, the Commissioner should have excluded those transactions involving pure sale of spare parts. As regards levy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inclusive of the handling charges. Therefore, we do not understand how service tax levy would apply especially when the goods are subject to sales tax/VAT on a value inclusive of handling charges. It is not in dispute that the handling charges are incurred in connection with the procurement of the parts. If that be so, they will obviously form part of the value of the goods when they are subsequently sold. 5.1 Section 67 of the Finance Act, 1994 mandate levy of service tax on a value or consideration received for rendering the services. Therefore, any consideration received for supply of goods is not covered within the scope of Section 67. The decisions of the Tribunal in the case of Ketan Motors Ltd. and Dynamic Motors, cited supra, also support this view. 6. Accordingly, the impugned order is clearly unsustainable in law and therefore, the same is set aside with consequential relief, if any, in accordance with law. (c) In the case of CCE v. Seva Automotive Pvt. Limited the Tribunal held as under:- 2. The respondent, M/s. Seva Automotive Pvt. Ltd. Nagpur, is registered as an authorised service station and rendering services as such and discharging service tax liability on their a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, following the above principle of law laid-down by Hon'ble Supreme Court and by Tribunals, in the present case the demand is not sustainable. Hence the impugned order is set-aside and the appeal is allowed. 5. From the above decision it can be seen that the issue in hand is squarely covered by the above cited decision. Therefore the handling charges is not liable to service tax. As regard the reliance placed by the revenue on the judgment of Hon'ble Bombay High Court in the case of Sehgal Autoriders Pvt Ltd Supra, we find that there is a difference of fact in this case and the case of Hon'ble Bombay High Court in as much as in the case of Sehgal Autoriders Pvt Ltd. the assessee had not charged the handling charges in the sale bill of the car whereas the same was separately recovered by issue a debit note. It is on this fact the Hon'ble Court has decided that the handling charges is not liable to VAT whereas in the present case the assessee has charged the handling charges in the very same invoice whereby the car is sold therefore due to this difference in fact in both the cases the Hon'ble Bombay High Court judgment cannot be made applicable in the fact of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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