Jubilant Motor Works (South) Pvt. Ltd. Vs Commissioner of GST & Central Excise (CESTAT Chennai)
M/s. Jubilant Motor Works (South) Pvt. Ltd. was engaged in the sale and service of AUDI brand cars and provided taxable 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. Following investigation, the department alleged non-payment of service tax on various incentive incomes received from Volkswagen and Castrol, forfeited car booking advances and CENVAT credit attributable to trading activities. The adjudicating authority confirmed service tax demand of Rs. 10,71,78,845/- for April 2011 to March 2016, ordered recovery of Rs. 6,58,91,965/- towards CENVAT credit, and imposed interest and penalties.
The appellant submitted that it could not be liable for the period before its business takeover, that the show cause notice did not specify the relevant sub-clause of Section 65(19) for the Business Auxiliary Services demand, that incentives were trade discounts arising from principal-to-principal sale transactions, and that forfeiture income represented liquidated damages rather than consideration for a service. It also submitted that reversal of proportionate CENVAT credit under Rule 6(3)(ii) could not be denied merely for failure to give prior intimation.
