Lovely Autos Vs Commissioner of Central Excise (CESTAT Chandigarh)
The appellant, an authorised service station of Bajaj Auto registered under the categories of “Authorized Service Station” and “Business Auxiliary Service”, collected ₹474 from customers under the “Lovely Ser-vice Club” scheme. During departmental audit, it was found that the amount was collected towards guaranteed servicing, engine oil replacement, replacement of certain parts and a gift. A show cause no-tice dated 07.01.2009 demanded service tax of ₹4,46,078 along with interest and penalties. The appel-lant accepted service tax liability on ₹200 per subscription, paid service tax of ₹1,88,220 thereon, and disputed the balance ₹274. It also contended that the notice was time-barred and sought waiver of penalties. The adjudicating authority confirmed the demand, interest and penalties, and the Commis-sioner (Appeals) upheld the order.
Before the Tribunal, the appellant argued that the balance amount represented the value of engine oil, replacement parts and gifts, qualifying for exemption under Notification No. 12/2003-ST. It also claimed benefit under Section 73(3), challenged invocation of the extended period, and sought cum-duty bene-fit. The Revenue contended that the notification required documentary proof specifically indicating the value of goods and materials, which the appellant had not produced, and further submitted that the appellant had failed to disclose the collections in its ST-3 returns.
