Service Tax
TRT-2025-
Cestat Chennai
Date:-26-05-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 26 May 2023
Parties: M/s. T.A.F.E Access Ltd. Vs Commissioner of GST & Central Excise
Facts –
- The Appellant, M/s. T.A.F.E Access Ltd., are authorised dealers of M/s. TATA Motors and are engaged in selling passenger cars and also provide free services to their customers during warranty period. The expenses incurred by them for providing such free services are reimbursed by the manufactures namely M/s. TATA Motors.
- While discharging service tax the appellant did not include the cost of materials/spares which was reimbursed by M/s. TATA Motors.
- A show cause notice was issued proposing to demand service tax along with interest and also for imposing penalties on the ground that the appellant has to include the cost of the spares/materials used for providing the free services.
Issue –
- Whether cost of the spares/materials used for providing the free services has to be included in taxable value?
Order –
- The Tribunal observed that the very same issue was considered by the Tribunal in the case of M/s. ABT Ltd. and others Vs. Commissioner of Central Excise, Coimbatore vide Final Order on 14.03.2018. It was held that “After a perusal of some of the sample invoices raised for such work, it was noted that the spare parts have in fact been sold on payment of VAT. Consequently, cost of spare parts cannot be included for purposes of levy of service tax. Such demand of service tax is not justified and hence are set aside.”
- In the appellant’s own case the very same issue was decided for the subsequent periods vide Final Order No.40394-40397/2019 dated 28.02.2019. It was held that “The matter is indeed covered not only by the ratio of the Apex Court in Intercontinental Consultants and Technocrats Pvt. Ltd. (supra) but also by the decision of this Tribunal in the case cited above. In view thereof, we find favour with the appellant.”
- After appreciating the facts and also applying the decision in the appellant’s own case the Tribunal held that the demand cannot sustain. In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs.
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