ORDER
S.L. Peeran, Member (J)
1. By these COD applications, the applicant is seeking condonation of delay of 23 days. The applicant contends that the Tax Consultant was out of station and he could not send the papers to the Tribunal although the papers were ready for dispatch. Considering the submission made in the affidavit by the Manager (Finance & Accounts), I am of the view that there is no latches on the part of the applicant. Hence, the COD application is allowed.
2. By both these stay applications, the applicants are seeking waiver of pre-deposit of Service Tax amount of Rs. 1,97,541 and Rs. 32,281/- respectively. The applicants were Agents of M/s. Maruti Udyog Ltd. The applicants M/s. Indus Motor Company had entered into a Dealership agreement with M/s. Maruti Udyog Ltd. They have been treated as Authorised Service stations. For all services carried out by them, they had paid Service Tax. The demands have been raised in respect of free services carried out by them in terms of the Agreement. It is the contention of the applicants that they do not receive any amounts for carrying out these free services on behalf of the company. Hence, the question of levy of Service Tax does not arise. In this connection, they rely on the Board’s Circular No. 62/11/2003-ST dated 21.08.2003. The said Circular exempts Service Tax from free service. However, this Circular has not been accepted by the authorities on the ground that they have received dealer’s margin. They have received commission as dealer’s margin. This is contested to by the applicants on the ground that dealer’s margin has no connection with the free services carried out by them. The dealer’s margin is received after the sale of the vehicle for carrying out the sale. The free services are not charged. Hence, no Service Tax is liable to be paid. The authorities have taken a view that such free services are inbuilt in the commission received by them and they are required to pay Service tax.
3. The learned Chartered Accountant submits that there is no bifurcation of the amounts for carrying out free services and the Show Cause Notice also does not bifurcate the amounts. The amounts have been computed without any basis. They have charged on the basis of the amounts collected from customers without granting free services. The authorities have relied on the Ministry’s clarification letter No. B11/1/2000-TRU dated 09.07.2001. It has been clarified that the amounts are required to be deposited. The learned Chartered Accountant argues that if the assessee were to get the dealer, they were to carry out the services free of cost and, therefore, they have not received any amount.
4. Heard learned JDR.
5. Considering the Circulars issued by the Ministry which contradicts the earlier Board’s Circular relied by the Chartered Accountant, the appellant should be put to terms. Out of the total amount of both these appeals, the appellants are required to pre-deposit Rs. 30,000/- (Rupees thirty thousand only) within a period of three months. On such deposits, the balance of Service Tax stands waived and recovery stayed. Failure to comply will entail dismissal of the appeals. On compliance, there shall be no recovery. Appeals to come up for reporting compliance of 10th August, 2007.
(Pronounced and dictated in open Court)