2018 (10) TMI 562 – CESTAT HYDERABAD – TMI – Taxability – extended warranty services on vehicles provided to customers – part of amount retained by appellant – case of Revenue is that the amount retained by the appellant is taxable under authorised service station services and appellant is liable to pay service tax on the amounts retained with applicable interest.
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Held that:- The genesis of the issue as to what is the amount retained by the appellant in the entire case records has not been considered by the lower authorities in these proceedings. The affidavit filed by the appellant herein indicates some figure which needs to be considered by the first appellate authority to arrive at a conclusion as to whether the refund application filed by the appellant is acceptable or otherwise.
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The issue of correct tax liability on the amounts retained by the appellant needs to be considered, then the adjudicating authority needs to reconsider the issue in respect of correct amount r
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re not offering the said consideration for service tax; that they have availed common input service tax credit of ₹ 24,75,562/- and did not follow the procedure laid down under Rule 6 of CENVAT Credit Rules, 2004, a demand notice was issued demanding service tax of ₹ 19,81,588/- on the extended warranty under authorized service station for the period April 2006 to March 2011 and demanding irregular credit of ₹ 24,75,562/-. After due process, the demand was confirmed by Addl. Commissioner, Service Tax. Aggrieved by such an order, an appeal was preferred by the appellant before first appellate authority alongwith a stay petition contesting that they had collected such extended warranty amounts on behalf of M/s Hyundai Motors India Limited and had remitted such amounts to them after retaining certain part of the amount. While disposing of the stay petition, Commissioner (Appeals) ordered pre-deposit of 50% of service tax confirmed and deposit of 100% irregular input serv
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aw rejected the refund claim. 3. Aggrieved by such an order, an appeal was preferred before the first appellate authority. The first appellate authority after granting an opportunity of representing the case and considering the submissions made by the appellant and his Counsel, came to a conclusion that the impugned order-in-original rejecting the refund claim was correct and accordingly rejected the appeal. Hence this appeal. 4. Ld. Counsel after taking the Bench through the case records submits that the entire plea of the appellant has been misconstrued by the lower authorities. It is his submission that the issue of discharging service tax liability on the amounts received as extended warranty is liable to be paid, is finalized by the first appellate authority in their own case by the Order-in- Appeal No. 95/2013 (H-II)S.Tax, dt.29.07.2013 and there is no appeal filed, but he draws attention to the findings of the first appellate authority in the said order and submits that the firs
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show cause notice went on a presumption that the amounts collected by the appellant are retained while the factual position is that the amounts have been collected from the customers but transferred to Hyundai Motors India Limited after retaining the amount due to appellant. He files an affidavit of Asst. Manager, Accounts of the appellant. 5. Ld. DR reiterate the findings of the lower authorities. 6. On careful consideration of the submissions made, I find that there is no dispute as to the facts that the appellant herein is providing extended warranty on vehicles to their customers as directed by M/s Hyundai Motors India Limited. For giving such services, appellant receives consideration from the customers. It is seen from the records that the entire case made up by the Revenue is on the ground that the amounts collected from the customers for extended warranty services given needs to be taxed while it is the case of the appellant that the amounts collected towards extended warranty
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sides, would mean that appellant herein is required to discharge service tax liability on the amount retained by him. It is also undisputed that during the proceedings which were initiated on the appellant, they had deposited substantial amount and if the service tax liability due is less than the amount, refund of differential amount is due to them. 7. I find that the genesis of the issue as to what is the amount retained by the appellant in the entire case records has not been considered by the lower authorities in these proceedings. The affidavit filed by the appellant herein indicates some figure which needs to be considered by the first appellate authority to arrive at a conclusion as to whether the refund application filed by the appellant is acceptable or otherwise. 8. In view of the foregoing, the issue of correct tax liability on the amounts retained by the appellant needs to be considered, then the adjudicating authority needs to reconsider the issue in respect of correct am
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