By TIOL News Service

MUMBAI, FEB 09, 2019: THE appellant, in addition to selling new vehicles, also provides the service of procuring pre-owned cars under a scheme called Maruti True Value scheme.

Under the said scheme, the customers intending to exchange the pre-owned vehicle with a new vehicle, approach the appellant, who evaluate the said vehicle and thereafter refurbish it, identify a new customer and transfer/sell the pre-owned car to the customer at certain amount.

The appellant rendered the services as a facilitator/agent between the old owner of the pre-owned car and the new customer to whom the pre-owned car was handed over.

Alleging that the service rendered by the appellant is taxable under ‘Business Auxiliary service', demand notices were issued for recovery of service tax. The difference between the sale price for the old cars and the purchased price of the new ones was treated as remuneration for the service rendered.

The Commissioner of Central Excise, Pune II confirmed the demands and accordingly an appeal was filed before the CESTAT.

During the hearing of the appeal, the appellant submitted that the impugned order was challenged by them [C.E.A No. 14 & 15 of 2014] along with other orders before the Kerala High Court and by an order dated 07.07.2017 - 2017-TIOL-1339-HC-KERALA-CX, the Kerala High Court had set aside the impugned order(s).

Inasmuch as since the order had already been set aside, therefore, the appeal becomes infructuous.

The AR did not dispute the facts.

The Bench, therefore, held -

"4. We find that the order of the learned Commissioner was subject matter of dispute, also before the Hon'ble Kerala High Court and Their Lordships set aside the impugned order, which is fairly accepted by the Revenue. In these circumstances, we find force in the contention of the learned Advocate for the appellant that the present appeal becomes infructuous in view of the Hon'ble Kerala High Court's order…"

The appeal was disposed of.

Fact-check:

"4. After hearing Sai, the Commissioner of Central Excise and Customs at Cochin, the adjudicating authority, through his order-in-original, dated 20.09.2013, confirmed the demand. Aggrieved, Sai filed an appeal before the CESTAT, Bangalore, which allowed it through its Order, dt. 13.02.2014. So, the Commissioner of Central Excise is before this Court.

7. After hearing Indus, the same adjudicating authority, through his order-in-original, dated 05.09.2013, confirmed the demand. Aggrieved, Indus filed an appeal before the CESTAT, Bangalore, which allowed it through its Order, dt. 19.02.2014. So, the Commissioner of Central Excise is before this Court.

81. …

We therefore hold that the  Final Order No.20227/2014 in ST/28543/2013-DB, dated 13.02.2014 and Order No.20272/2014 in ST/28490/2013-DB, dated 19.02.2014  suffer no legal infirmity. As a result, we dismiss both the appeals. No order on costs." - Kerala High Court - 2017-TIOL-1339-HC-KERALA-CX.

(See 2019-TIOL-432-CESTAT-MUM)