The Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ), Bangalore in a recent matter held that Teflon Coating, Mat Fixing and Accessory fitting done before 01.07.2012 may not be liable to Service Tax.
The decision was given by the Tribunal while adjudicating a Service Tax Appeal filed by AVG Motors, an authorized dealer of Maruti Suzuki India Ltd ( MSIL ) for their passenger cars and being registered with the Central Excise Department as service provider under the category of ‘Authorized Service Station’ and ‘Business Auxiliary Service’.
The Appellant provides additional services of mat fixing, teflon coating and accessory fitting on on the new cars meant for delivery, upon express requests raised by the purchasers.
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The Revenue contended such provision of temporary or permanent registration to be a taxable service, leading to demand proceedings and subsequent penalty and interests for the period from 01.10.2009 up to 30.06.2012 under Section 65(105)(zo) of the Finance Act, 1994 and under Section 65B (51) for the period from 01.07.2012 to 31.03.2014.
P. Raghunathan, appearing for the Appellant submitted that such modifications are made when the vehicles are rolled out of the showroom and that the cost of the material and service charges for the intended services are duly collected from the customer. The counsel further submitted that the vehicle still remained with the dealer while conducting the modifications, and hence the same may not be deemed a service.
The two-member Bench of CESTAT, Bangalore composed of Judicial Member P.A. Augustian, and Technical Member Pullela Nageswara Rao, considered the submissions and attested to the Appellant’s submissions that they had been paying service tax from 01.07.2012.
The additional services such as Teflon Coating, Mat Fixing and Accessory fitting had been discussed by the Tribunal in numerous prior decisions; consequently, the Bench held that the assessee is not liable to pay service tax for the period prior to 01.07.2012.
Concludingly, the Bench attested to the Appellant’s submissions that the Adjudicating Authority had not considered the submissions raised by the assessee and confirmed the demand prejudicially. The appeal was allowed in part and remanded to reconsider the demand of service tax after due consideration of the details furnished by the Appellant.
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