Case Law Details

Case Name : M/s Marudhara Motors Vs. CCE (CESTAT Delhi)
Appeal Number : Appeal No. ST/58662/2013- [DB]
Date of Judgement/Order : 01/12/2017
Related Assessment Year :
Courts : All CESTAT (771) CESTAT Delhi (273)

M/s Marudhara Motors Vs. CCE (CESTAT Delhi)

1. The brief facts of the case are that the appellant is engaged in the trading activity i.e. sale of vehicle and spare parts and also provides various taxable services, for which it got itself registered with the service tax department. During the disputed period, documents processing charges received by the appellant from the buyer of vehicle was considered as a service by the Department under the taxable category of business auxiliary service and accordingly, Service Tax demand was confirmed against it.

2. The Ld. Advocate appearing for the appellant submits that the appellant provides the document processing service for processing of documents for the customers, who are interested in getting their vehicle funded by the banks/financial institutions. Thus, he submits that the relationship between appellant and its customers are purely commercial in nature and there is no involvement of any financial institutions/banks and thus, such service provided by the appellant to its customers should not fall under the purview of ‘business auxiliary service’.

3. On the other hand, Ld. DR appearing for the revenue reiterates the findings recorded in the impugned order.

4. Heard both sides.

5. We find that the appellant is not providing any service to the clients for and on behalf of the financial institutions or banks. Rather there is no contractual agreement exist between the appellant and the banks/ financial institutions that it should be remunerated for providing services to the clients. Since, for providing documentation service, the appellant claims the charges from its customers, the same should not be considered as business auxiliary service, in as much as, there is no involvement of any third party, on whose behalf, the appellant provides service to its customers. Accordingly, the Service Tax demand confirmed against the appellant under business auxiliary service should not stand for judicial scrutiny. Therefore, the impugned order is set aside and the appeal is allowed in favor of the appellant.

[Order dictated and pronounced in the open court]

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