Service Tax
TRT-2025-
Cestat Chennai
Date:-10-08-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order date – 10 August 2022
Facts –
- The appellant Popular Vehicles and Services Pvt. Ltd. are engaged in providing service of Authorized Service Station as well as they trade spares and accessories of Maruti brand cars.
- The appellant is availing CENVAT credit of Service tax paid on various services such as telephone, security service etc. which are common input services for both taxable services and trading of goods. Under Rule 2(e) of CCR 2004 trading of goods has been exempted service w.e.f. 01.04.2011.
- Show cause notice dated 04.04.2013 was issued for the period October 2010 to March 2011 demanding CENVAT credit wrongly taken and utilized by the appellant. Further calling the appellant to show cause why there is short paid service tax for the period October 2010 to March 2012.
- The original authority as well as the appellate authority confirmed the demand, hence this appeal.
Issue –
- Whether ‘trading of goods’ can be considered as an exempted service under Rule 2(e) of CCR 2004?
Order –
- The Tribunal accepted the contention of the appellant that w.e.f. 01.04.2011, trading has been brought within the ambit of ‘exempted service’ under Rule 2(e) of CCR 2004. Though the period involved in the present case is prior to 01.04.2011 and hence the tribunal held that the show cause notice in regard to the demand of wrongly availed cenvat credit is time-barred and requires to be set aside. The same view was taken in Kundan Cars Pvt. Ltd. Vs CCE Pune.
- They also held that since there is no evidence to show that there has been fraud, collusion or suppression of facts on the part of the appellant, the penalty imposed is set aside without disturbing the demand of service tax along with interest.
- Therefore, the appeal was partly allowed.
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