The CESTAT New Delhi allowed the appeals of M/s Audi Motors Pvt. Ltd. & Ors vide [Final Order Nos. 51773-51774/2025 dated 19.11.2025] by holding that the incentives and trade discounts received from Maruti Suzuki India Ltd. for achieving sales targets were not consideration for any service but merely part of the sale price of vehicles , since the dealership operated on a principal-to-principal trading basis and not as an agent providing promotional services; therefore, such incentives could not be classified as taxable services and the activity itself fall under the negative list “trading of goods” under Section 66D(e), levying service tax unsustainable; accordingly, the Tribunal set aside the entire demand of Rs. 2.21 crore along with interest and penalties, relying upon precedent decisions including Kafila Hospitality (L.B.) and several dealership-based judgements. The appellants were effectively represented by Advocate Ms. J. Kainaat, whose submissions were fully accepted.

The CESTAT Bench, New Delhi originally dismissed the appeal of M/s Jai Durga Ice Factory vs. CCE vide Final Order No. 50409/2025 dated 18.03.2025. The dispute concerned whether the activity of chilling of milk for the period 01.07.2012 to 31.03.2013 fell under the negative list in Section 66D(d)(iii) or constituted a taxable service under Section 65B (44) in the post-negative regime. In its earlier order, the Tribunal examined only the merits and held that the processes covered in the negative list are confined to agricultural or farm-level operations, whereas milk is neither “agricultural produce” nor a farm-level operation as defined in the Finance Act. Consequently, it concluded that the activity of chilling of milk satisfies all the three elements of “service” under Section 65B(44) and is taxable after 01.07.2012. Reliance placed by the appellant on GST-era Notification No. 11/2017 and Gujarat High Court decision was held to be irrelevant since those relate to animal husbandry, a concept not recognised under the Finance Act, 1994. The Tribunal dismissed the appeal and upheld the Commissioner (Appeals)’ confirmation of service tax. Subsequently, in ROM Proceedings, the appellant highlighted a fundamental legal defect: although the period was post-negative list, the Show Cause Notice invoked only pre-negative list provisions, while the adjudicating authority and Commissioner (Appeals) confirmed the demand under post-negative list provisions, not invoked in the SCN. Invoking the settled principle that no authority can travel beyond the show cause notice, and relying on the Tribunal’s own precedent in Kalya Construction, the CESTAT acknowledged the mistake as an error apparent on the face of the record. Accordingly, the Tribunal rectified its earlier decision holding that the impugned order passed by the Commissioner (Appeals) is set aside and the appeal is allowed vide Misc. Order No. 51119/2025 dated 19.11.2025, on the sole ground that the SCN was defective and the entire confirmation of demand was void ab initio. The appellant was effectively represented by Advocates Shri Bipin Garg and Ms. J. Kainaat, whose submissions were fully accepted in the ROM proceedings.