The Customs, Excise & Service Tax Appellate Tribunal, Allahabad, ruled that no service tax liability can be fastened on unidentified service.
The tribunal found that the demand has been made by referring to certain incomes reflected in the ledger of the Appellant. However, show cause do not specify the source of income i.e. the person who has made these payments to the Appellant i.e. demand stands made without specifying the service recipient.
The bench stated that the definition of taxable service itself contemplates that service should be provided to an identified client and consideration should have been received from the said client or on his behalf. In the absence of such an identification at any stage of proceeding the demand made under this category cannot be upheld.
The bench relied on the appellants own case Delhi bench in which the tribunal held that Revenue has ordered for payment of Service Tax under various receipts recorded under miscellaneous income. These include loading/unloading charges, Pollution Check-up charges, penaltycum processing charges etc. It is obvious that these amounts have been received not towards provision of any service on behalf of MUL or anybody else. Consequently, there is no justification for levying Service Tax under BAS.
Facts
The Appellant is an Authorized Service Station of Maruti Udyog Limited and is engaged in providing various types of services to the Purchaser of Maruti vehicles either on behalf of Maruti or on their own-shelf. They are registered under the category of ‘Authorized Service Station’.
During the course of audit of the Appellant for the period from 2007-08 to March 2012 it was observed that the Appellant have received certain amounts under the category of ‘Miscellaneous Income’ and they have not paid any service tax in respect of such receipts. Auditors were of the view that these receipts are in relation to ‘Business Auxiliary Service’ provided by the Appellant and hence are liable to service tax. A Show Cause Notice was issued to the Appellant referring to the audit objection.
Conclusion
The tribunal relied on the judgment of The Madhya Pradesh State Mining, Corporation Limited in which the tribunal held that allocation of area development charges by the State Government can be regarded as income of the appellant, but it cannot be treated as consideration towards a service.
In view of the case laws the bench did not find any merits in the order though in both the order the Commissioner (Appeals) very strenuously tried to establish that these services are finally going to benefit Maruti Udyog Ltd.
Case Details
Case Name: M/s Rohan Motors Ltd. v/s Commissioner, Service Tax, Noida
Citation: Service Tax Appeal No.70215 of 2016
Tribunal: CESTAT Allahabad
Coram: Mr. P.K. Choudhary, Member (Judicial) and Mr. Sanjiv Srivastava, Member (Technical)
