The Delhi Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) has held that assisting registration of vehicles with the Regional Transport Office (RTO) cannot be considered a declared service under section 66E(e) of the Finance Act, 1994 and set aside the demand of service tax.
M/s. Shakumbhari Automobiles Pvt. Ltd., the appellant sought the quashing of the order dated passed by the Commissioner, Customs, Central Excise and Service Tax adjudicating the three show cause notices. The Commissioner has confirmed the demand of Rs. 14,89,496/- with penalty and interest and has dropped the demand of Rs. 4,09,43,169/-.
The appellant is an authorised Maruti Car Agency in Roorkee. It purchases and sells Maruti Cars and spare parts and also carries out work of repair of Maruti vehicles. The appellant received the amount from the customers who purchased vehicles for assisting the registration of the vehicles with the Regional Transport Office tax under “business auxiliary service” as defined under section 65(19) of the Finance Act, 1994 and made taxable under section 65(105)(33b) of the Finance Act.
The first show cause notice demanded service tax under BAS. The subsequent two show cause notices did not contain any fresh proposal or allegation but merely referred to the first show cause notice dated 15.04.2014. It was evident that even for the period post 01.07.2012 the activity could not have been considered as a declared service and, therefore, the demand could not have been confirmed.
A Two member bench comprising Justice Dilip Gupta, President and Ms Hemambika R Priya,(Technical) has held that “Apart from the fact that the demand could not have been confirmed under section 65B(44) of the Finance Act for the reason that the activity cannot be considered as a declared service under section 66E(e) of the Finance Act, a demand cannot also be confirmed on an allegation other than an allegation contained in the show cause notice.”
While allowing the appeal, the CESTAT set aside the impugned order.
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