Decided on July 10,2015

Rkbk Automobiles Pvt. Ltd. Appellant


G. Raghuram, J. (President) - (1.)HEARD the ld. Counsel for the appellants and the ld. AR for the respondent/Revenue. The appellant is the assessee and has preferred this appeal against the order dated 29 -4 -2010 passed by the ld. Commissioner (Appeals), Central Excise, Allahabad. The impugned order granted part relief to the assessee in the appeal preferred by it, to the extent of dropping penalty under Section 76 of the Finance Act, 1994 while confirming the primary adjudication order dated 23 -7 -2009 passed by the Assistant Commissioner, Central Excise, Gorakhpur whereby service tax demand of Rs. 1,58,384/ - along with interest under Section 75, and penalty of an equivalent amount under Section 78 of the Act was confirmed, apart from penalty under Section 76 which as already stated was dropped by the lower appellate authority. Proceedings were initiated against the appellant for under -remittance of service tax during October 2003 to March 2005. The appellant obtained registration for providing services as an authorised service station for service or repair of vehicles and for providing Business Auxiliary Service (BAS) as well. The appellant is also the Maruti Authorised Service Station, apart from being a dealer of Maruti brand vehicles.
(2.)INVESTIGATIONS revealed that the appellant charged labour and service charges on refurbishment services and raised invoices on "RKBK True Value", reflecting in each invoice, the appropriate service tax component as well, but failed to remit service tax to the exchequer. Refurbishment of old vehicles involved repairs, change of defective parts and other value additions to provide a fresh look to old cars.
In response to the show cause notice, the appellant claimed that it had purchased vehicles, refurbished and repaired them at its own workshop and thereafter would sell these vehicles to customers under the Maruti brand "True Value". Since refurbishment was done on old cars purchased by it was a service to itself, and would not amount to service provided to another, was the substantive defence presented before the primary authority and reiterated before the lower appellate authority as well.

(3.)BOTH the authorities below rejected this defence and confirmed the demand for service tax, interest and penalties, subject to appellate modification by way of dropping penalty under Section 76. Concurrent findings recorded by the authorities below was that evidence/material on record established that invoices were raised by the appellant on "RKBK True Value" and these indicated not only the value of repairs and refurbishment provided but also the UP Trade Tax and the service tax components. From the invoices (provided by the appellant itself before the adjudicating authorities), the authorities below legitimately drew the inference that the specified taxable service was provided by the appellant to RKBK True Value, another entity for which not only were invoices raised on the later, but the invoices clearly and categorically included components of UP Trade Tax and service tax.

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