IIFL Holding Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
M/s. Jubilant Motor Works (South) Pvt. Ltd. was engaged in sales and service of AUDI brand cars and provided services including Authorised Service Station Service and Business Auxiliary Service. The company was established in December 2015 and took over the Chennai operations of M/s. Jubilant Motor Works Pvt. Ltd. from December 2015, along with assets and liabilities relating to those operations.
Following investigation, the Department alleged that the appellant had not declared its entire service income in ST-3 returns and had availed CENVAT credit on common input services used for taxable services and trading activities. The Department also alleged that incentives received from Volkswagen and Castrol and amounts representing forfeited car booking advances were liable to service tax. A show cause notice dated 18.10.2016 proposed service tax demand for April 2011 to March 2016 and recovery of 5%, 6% or 7% of the value of exempted services in relation to CENVAT credit.
The original authority confirmed service tax of Rs. 10,71,78,845/- under the proviso to Section 73(1) of the Finance Act, 1994, ordered recovery of Rs. 6,58,91,965/- under Rule 14(1)(ii) of the CENVAT Credit Rules, 2004 read with the proviso to Section 73(1), and imposed interest and penalties.
