2026-VIL-1788-CESTAT-BLR-ST
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SERVICE TAX CESTAT Cases

Service Tax - Applicability of Exemption Available to Authorised Service Station for Pre-Delivery Inspection and After Sales Services Rendered on Behalf of Sister Concern - Appellant rendered repair of motor vehicles, pre delivery inspection and warranty services on behalf of its sister concern, which was the authorised dealer of the manufacturers, and the demand of service tax under Business Auxiliary Service was confirmed for the period 01.04.2006 to 31.03.2007 along with interest and penalties - Whether the benefit claimed as an authorised service station is available to the appellant - HELD - The claim made by the appellant as applicable to an authorised service station for exemption from service tax is not applicable since the appellant is not an authorised service station. The appellant was carrying out activities on behalf of its sister concern - The contention based on the Circulars therefore does not help the appellant on this aspect, and the question of the demand being sustained or not was decided on the other grounds - Classification under Business Auxiliary Service and Invocation of Extended Period of Limitation When Same Demand Was Dropped in Earlier Adjudication - Appellant provided repair, pre delivery inspection and warranty services on behalf of its sister concern, and SCN dated 10.12.2007 demanded service tax under Business Auxiliary Service for the period 01.04.2006 to 31.03.2007 by invoking the extended period - Commissioner (Appeals) dropped the penalty under Section 76 but upheld the demand, interest and the remaining penalties - Appellant contended that the services can at best be classified under Business Support Services and not Business Auxiliary Service, that the department was aware of the facts as the registration was surrendered on its advice, and that there was no suppression to invoke the extended period - Whether the demand under Business Auxiliary Service confirmed by invoking the extended period of limitation is sustainable - HELD - For the very same period from 01.04.2006 to 30.09.2007, the SCN issued by another Commissionerate was dropped by the Adjudicating Authority on the ground that the appellant had sought clarification regarding tax liability and had surrendered the registration in 2006 only on the advice of the department. It was further held in that order that the services rendered by the appellant to its sister concern do not merit classification under Business Auxiliary Service, and no appeal was filed by the Revenue against that order. In these facts, the demand confirmed by invoking the extended period of limitation under the category of Business Auxiliary Service is unsustainable - The impugned order is set aside and the appeal is allowed
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