Service Tax
TRT-2025-
Cestat New Delhi
Date:-06-02-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 06 February 2023
Parties: M/s Veer Prabhu Marketing Ltd. Vs Commissioner of Central Excise – Jodhpur
Facts –
- The Appellant, M/s Veer Prabhu Marketing Ltd, is dealer of Tata Motors Ltd. for sale, service and spare parts of medium and heavy commercial vehicles.
- If the appellant met specific sales targets various incentives were available to the appellant as per the policy of the Tata.
- The Appellant filed a declaration under the VCES to settle tax dues and seek immunities from interest, penalties and other proceedings under the Finance Act, 1994 and declared taxable receipts and paid service tax on the same.
- A show cause notice dated 18.11.2014 was issued to the appellant proposing to reject the declaration under Section 111 of the Finance Act, 2013 on the ground that the declaration was substantially false.
Issue –
- Whether the appellant is liable to pay Service tax on various incentives received from Tata as per the dealership agreement?
Order –
- The Tribunal observed that additional incentives is in form of a trade discount to encourage the dealer to buy and sell larger number of vehicles. Therefore, the demand on the incentives received by the appellant is not exigible to Service tax.
- For the amount received for warranty services of medium and heavy commercial vehicles of Tata Motors of which service rendered between 01.04.2012 to 30.06.2012 are not taxable, but services post 01.07.2012 were taxable. The break up of the figures are submitted, hence the matter is remanded back to the Commissioner for verification of these figures.
- It was held that considering the above facts there was no substantial mis-declaration by the appellant in the VCES declaration. Consequently, the appellant enjoys the immunity under VCES. The penalty imposed upon the appellant under section 78 cannot be sustained and the appeal is allowed by way of remand.
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