Ratnaprabbha Motors vs Aurangabad

[Arising out of Order-in-Appeal No. AGS(14)133/2010 dated 11/01/2010 passed by the Commissioner of Customs & Central Excise (Appeals), Aurangabad.]

For approval and signature:

Honble Shri M V Ravindran, Member (Judicial) Honble Shri C J Mathew, Member (Technical)

1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? : No 2. Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? : No 3. Whether Their Lordships wish to see the fair copy of the Order? : Seen 4. Whether Order is to be circulated to the Departmental authorities? : Yes

Ratnaprabbha Motors

Appellant versus

Commissioner of Central Excise

Aurangabad

Respondent

Appearance:

Shri R.S. Indani, Advocate for the appellant

Shri R.K. Das, Dy. Commissioner (AR) for the respondent

CORAM:

Honble Shri M V Ravindran, Member (Judicial) Honble Shri C J Mathew, Member (Technical)

Date of hearing: 12/08/2015 Date of decision: 12/08/2015

ORDER NO: ____________________________

Per: M.V. Ravindran:

This appeal is directed against Order-in-Appeal No. AGS(14)133/2010 dated 11/01/2010 passed by the Commissioner of Customs & Central Excise (Appeals), Aurangabad.

2. The issue involved in this case is regarding the service tax liability on the appellant on:

(i) amounts received as commission from various finance companies for distribution of finance to the prospective buyers of the vehicles sold by the appellant;

(ii) commission received for sale of machines of M/s. JCB;

(iii) commission received for sale of used cars from M/s. Auto Mart India Ltd.

Revenue authorities were of the view that these activities which resulted in receipt of commission by the appellant would fall under the category of Business Auxiliary Service. A show cause notice was issued which was contested by the appellant on merits as well as on limitation. The adjudicating authority confirmed the demands raised with interest and also imposed penalties.

3. On an appeal being preferred, the first appellate authority agreed with the contentions raised by the appellant as to non-taxability of the commission received from Auto Mart India Ltd. and the extended period cannot be invoked in respect of commission received from various finance companies. The first appellate authority, however, confirmed the demands raised under the head Business Support Services for the commission received from M/s. JCB. Appellant contest the service tax liability on the commission received by them from M/s. JCB.

4. Learned counsel for the appellant submits that the show cause notice and the adjudicating authority has classified the services under Business Auxiliary Service while the first appellate authority has classified the same under Business Support Services which he cannot do so. It is his submission that on this ground only the impugned order is liable to be set aside. He would also submit that the extended period which has been invoked in the case of demand of service tax on commission received from M/s. JCB is also incorrect. He would submit that the penalty imposed by the appellate authority under Section 78 is also incorrect.

5. Learned Departmental Representative reiterates the findings of the lower authorities.

6. On consideration of the submissions made by both the sides, we find that the Revenue is not in appeal against the demands dropped by the first appellate authority holding that the extended period is not invokable in the case of service tax liability on commission received from financial institutions. We find that the first appellate authority has recorded correct reasoning for confirming the demand raised for the amounts received from the financial institutions by the appellant and we do not find any reason to interfere with such an order. Appellant has been correctly extended the benefit of limitation and the first appellate authority has confirmed the demands within the limitation period. In our view, this order of the first appellate authority does not require any interference.

7. As regards the demands confirmed under Business Auxiliary Service for the commission received from M/s. JCB, we do not find that the first appellate authority has travelled beyond the show cause notice issued. The show cause notice specifically talks about the demands to be raised on the appellant under the category of Business Auxiliary Service which was contested by the appellant before the lower authorities. The adjudicating authority has also recorded the findings as the service would fall under the category of Business Auxiliary Services and in the appeal memorandum before the first appellate authority, the appellant herein contested the issue on that ground only. In our view, the impugned order of the first appellate authority is not going beyond the show cause notice issued. The first appellate authority has undoubtedly travelled beyond the allegations in the show cause notice and has confirmed the demands under Business Support Services which, in our view, is incorrect and unsustainable. In the peculiar circumstances, we find that the impugned order to the extend it confirms the demand raised on the commission received form M/s. JCB under Business Support Services is liable to be set aside and we do so.

8. In view of the foregoing, we uphold the impugned order to the extent it is not contested by the appellant and set aside the demands as indicated herein above.

(Pronounced in Court)

(C J Mathew) Member (Technical) (M V Ravindran) Member (Judicial)

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