COMMISSIONER OF CENTRAL EXCISE Vs. JABALPUR MOTORS LTD.

JUDGEMENT

(1.) THIS is an appeal filed by the Joint Commissioner, Central Excise & Service Tax, Indore against the Order -in -Appeal No. IND -1/152/2009, dated 11 -9 -2008 passed in respect of M/s. Jabalpur Motors Ltd. (hereinafter referred to as the respondents). Vide Orders -in -Original No. 05 -07/AC/DEM/ST, dated 22 -5 -2008, demand in respect of three show cause notices was confirmed as under along with penalties under Sections 76, 77 & 78 of Finance Act, 1994.

(2.) THE respondent have contended that M/s. MUL have not reimbursed any amount towards providing free services to car buyers as it is their (the respondents') duty as car dealers to do so and M/s. MUL has also confirmed not having made any such reimbursements. Also no service is being provided to M/s. MUL for reimbursing the salary of mobile van drivers. They further contended that there has been no wilful misstatement or suppression of facts.

(3.) IT is evident from the above definition that the liability to service tax is on account of the said service provided to a customer. The service is provided to the car buyers who are the customers. For the free services, no amount is charged from the customers. As regards the contention that amount towards the free services is reimbursed by Maruti Udyog Ltd., it is seen that Maruti Udyog Ltd. have categorically stated that they do not reimburse any amount towards such free services to the dealers. The respondents have also stated that providing such free services is part of the functions and duties of dealers who are entitled to the dealership commission. Also the free services are rendered to the car buyers and not to M/s. MUL and the car buyers pay nothing therefor. Seen in this light it is evident that the demand of service tax as per column 5 of the table above is misconceived. Coming to the demand of service tax on the amount received on account of salary of drivers of vans used for providing mobile service to the car owners shown in column 4 of the table, it is evident that the customer in this case is the car owner who is the recipient of service. M/s. MUL receive no service nor are M/s. MUL, the respondents' customers. Thus the respondents have not provided the service of authorised service station to them (i.e. M/s. MUL). Accordingly this amount cannot be made liable to service tax under the category of authorised service station service. In the light of the foregoing, we find that the appeal filed by the Revenue is not sustainable and is therefore dismissed.