CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL, BANGALORE REGIONAL BENCH - COURT NO. 1 Service Tax Appeal No. 20133 of 2014 [Arising out of Order-in-Appeal No.221 to 222/2013-S.T dated 07.10.2013 passed by the Commissioner of Central Excise, Customs and Service Tax (Appeals), Cochin]

M/s. Indus Motors Company Pvt. Ltd., Appellant(s)

City Towers, M.G. Road, Thevara, Ernakulam District, Kerala.

VERSUS Commissioner of Central Excise and Service Tax, C.R. Building, Respondent(s)

I.S. Press Road, Ernakulam, Cochin, Kerala-682 018.

AND Service Tax Appeal No. 20134 of 2014 [Arising out of Order-in-Appeal No.221 to 222/2013-S.T dated

07.10.2013 passed by the Commissioner of Central Excise, Customs and Service Tax (Appeals), Cochin]

M/s. Indus Motors Company Pvt. Ltd., Appellant(s)

City Towers, M.G. Road, Thevara, Ernakulam District, Kerala.

VERSUS Commissioner of Central Excise and Service Tax, C.R. Building, Respondent(s)

I.S. Press Road, Ernakulam, Cochin, Kerala-682 018. APPEARANCE:

Mr. Unnikrishnan, Chartered Accountant for the Appellant Mr. Maneesh Akhoury, Assistant Commissioner (AR) for the Revenue CORAM: HON'BLE DR. D.M. MISRA, MEMBER (JUDICIAL)

HON'BLE MRS. R. BHAGYA DEVI, MEMBER (TECHNICAL)

Final Order No. 20281 - 20282 /2026 DATE OF HEARING: 11.09.2025 DATE OF DECISION: 10.03.2026 PER: D.M. MISRA These two appeals are filed against Order-in-Appeal No.221 to 222/2013-ST dated 07.10.2013 passed by the Commissioner of Central Excise, Customs & Service Tax (Appeals), Cochin.

2. Briefly stated the facts of the case are that during the course of verification of the records of the appellant, it was noticed that the appellant was providing free service of the Maruti vehicles as per the Dealership Agreement between the appellant and M/s. Maruti Udyog Ltd. (MUL, for short). Alleging that they have not discharged the service tax of the services rendered during warranty period of the Maruti make vehicles sold through their own showroom and also they have not paid service tax on the cost of spares, accessories replaced during the warranty period and extended warranty scheme, show-cause notice was issued to them for recovery of service tax for the period from April 2006 to March 2009 amounting to Rs.4,98,818/- and for the period from April 2009 to September 2010 amounting to Rs.3,70,469/- with interest and imposition of penalties. On adjudication, the demand of Rs.4,98,818/- was confirmed with interest and equivalent penalty and other penalties; reduced the demand of Rs.3,70,469/- to Rs.1,64,220/- and confirmed with interest. He also imposed penalties under Sections 70, 78 but dropped penalty under Section 76 of the Finance Act, 1994. Aggrieved by the said order, the appellant filed appeals before the learned Commissioner(Appeals) who in turn partially rejected their appeals. Hence, the present appeals.

3. At the outset, the learned Chartered Accountant for the appellant has submitted that the value of spare parts is reimbursed by the MUL to the appellant as authorised dealer of Maruti vehicles in Kerala State. The terms and conditions of warranty services are reflected in their agreement enclosed with the appeal paper book. He has submitted that for providing services to the customers of Maruti vehicles, no amount would be charged during warranty period, instead the entire amount would be reimbursed by the MUL for which invoices were raised by the appellant. The amount received from MUL was accounted as warranty income in the books of accounts. He has submitted that the issues are settled in favour of the appellant by various orders of different Benches of CESTAT even by Hon’ble Supreme Court. No service tax can be demanded on the value of spare parts received by the appellant from MUL as it was only a sort of reimbursement of cost incurred by the appellant while servicing the vehicles during the warranty period. Referring to the judgment of Hon’ble Supreme Court in the case of CCE Vs. Tata Motors Ltd. [2019-TIOL-418-SC], he has submitted that war