Case Law Details
Kankariya Automobiles (P) Ltd Vs Commissioner of Central Excise & Customs (CESTAT Mumbai)
From the records and narration of Learned Authorised Representative, it would appear that the appellant, an authorized dealer and service centre for motor vehicles, had provided space for insurance companies to solicit customers of insurance contracts on the vehicles sold by them.
From the grounds of appeal, it is seen that the appellant has also referred to the very same decision of the Larger Bench of Tribunal to contend that the distinction between mere provision of ‘table space’ and actual rendering of service necessitated ascertainment.
In our view, the decision in re Pagariaya Auto Centre, followed in the several decisions of the Tribunal, has clearly determined, in general, the taxability of receipts from insurance companies operating at the premises of motor vehicle dealers. The exclusion enunciated in the decision of the Larger Bench is the latitude afforded should an assessee be able to establish that only ‘table space’ was provided.
On a perusal of the impugned order, as well as that of the original authority, and the grounds of appeal, we find no justification proffered for in support of the claim of the appellant that the exclusion applies to them. Therefore, taxability of the receipts in the hands of the appellant is no longer in dispute.
FULL TEXT OF THE CESTAT JUDGEMENT
None appeared for M/s Kankariya Automobiles (P) Ltd who, aggrieved by order-in-appeal no. NGP/EXCUS/000/APP/322/14-15 dated 19th March 2015 of Commissioner of Central Excise & Customs (Appeals), Nagpur, has filed this appeal but, nevertheless, has been consistent in not being represented despite several adjournments and notices. At the same time, we take note that the submissions of Learned Authorised Representative suffice for disposal of this appeal on merits.
2. The issue in question is the non-discharge of tax liability of ₹17,46,066/-, as provider of ‘business auxiliary service’, for the period between April 2007 and January 2012 which was confirmed by the original authority as payable under proviso to section 73(1) of Finance Act, 1994, along with interest thereon under section 75 of Finance Act, 1994, besides imposing penalties under section 76, 77 and 78 of Finance Act, 1994. From the records and narration of Learned Authorised Representative, it would appear that the appellant, an authorized dealer and service centre for motor vehicles, had provided space for insurance companies to solicit customers of insurance contracts on the vehicles sold by them.
3. Learned Authorised Representative submits that the taxability, under challenge in this appeal, stands settled by the decision of the Tribunal in Addis Marketing v. Commissioner of Central Excise, Mumbai [2017 (50) STR 56 (Tri.-Mumbai)], in City Honda v. Commissioner of Central Excise, Service Tax & Customs, Bangalore [2018 (9) GSTL 412 (Tri.-Bang.)], in Arpanna Automotive Pvt Ltd v. Commissioner of Customs & Central Excise [2016 (43) STR 397 (Tri.-Mumbai)] and in Hyundai Motor India Ltd v. Commissioner of Central Excise and Service Tax (LTU), Chennai [2018-TIOL-2899-CESTAT-MAD.
4. We find that all of these relied upon the decision of the Larger Bench of the Tribunal in Pagariaya Auto Centre v. Commissioner of Central Excise, Aurangabad [2014 (33) STR 505 (Tri.Del.)]. From the grounds of appeal, it is seen that the appellant has also referred to the very same decision of the Larger Bench of Tribunal to contend that the distinction between mere provision of ‘table space’ and actual rendering of service necessitated ascertainment.
5. In our view, the decision in re Pagariaya Auto Centre, followed in the several decisions of the Tribunal, has clearly determined, in general, the taxability of receipts from insurance companies operating at the premises of motor vehicle dealers. The exclusion enunciated in the decision of the Larger Bench is the latitude afforded should an assessee be able to establish that only ‘table space’ was provided.
6. On a perusal of the impugned order, as well as that of the original authority, and the grounds of appeal, we find no justification proffered for in support of the claim of the appellant that the exclusion applies to them. Therefore, taxability of the receipts in the hands of the appellant is no longer in dispute.
7. In re Addis Marketing, the circumstances of the decision by the Larger Bench as well as that of many other similarly situated dealers were considered and it was held that the facts and circumstances preclude presumption of fraud, collusion, willful mis-statement, suppression of facts or contravention with intent to evade payment of service tax. We find from the records that the appellant had discharged tax liability of ₹ 17,46,066/- and interest of ₹ 6,39,918/- on 14th March 2012 which precedes issue of show cause notice. In the light of section 73(4) of Finance Act, 1994, which is the sole ground for denying recourse to section 73(3) of Finance Act, 1994, it is clear that the appellant herein has discharged tax liability in the manner contemplated by section 73(3) of Finance Act, 1994, upon intimation by the jurisdictional central excise officers. Consequently, in accordance with Explanation 2 therein, the assessee is not liable to any penalty under Finance Act, 1944. The appeal is, therefore, allowed to the limited extent of setting aside the penalties imposed by the original authority and upheld in the impugned order.
(Order pronounced in the open court on 05/08/2021)
