2015 (8) TMI 804 - AT - Service Tax

Valuation of service - Inclusion / exclusion of value of the materials supplied - whether the appellants have supplied/sold the materials during the course of rendering of the repair services and if so, whether they are eligible for benefit of Notification No. 12/2003 - Held that - It is seen that, in the invoices raised, the appellant had indicated the value of the materials supplied during the course of rendering of the service. Though the descriptions given are in general terms and does not indicate the nature of the materials supplied, there is evidence of the quantity and value of materials supplied. The appellants have also furnished a copy of the VAT Returns filed by them before the jurisdictional VAT authorities, wherein they have claimed exemption from tax in respect of the materials supplied. They have also produced a Chartered Accountant s certificate certifying that the appellants have sold the materials and the figures given in the VAT Returns are correct. The sub-contractors have also confirmed the value of the materials supplied on which Service Tax has been demanded by the adjudicating authority. Since the issue relates to verification of factual details, we are of the considered view that the matter has to go back before the adjudicating authority for consideration afresh of all the documentary evidences - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
Service Tax liability on materials supplied during rendering of services.

Analysis:
The appeal was against an Order-in-Original demanding Service Tax for not discharging tax liability on materials supplied during the repair services. The appellant claimed exclusion of material value but lacked documentary evidence, leading to the confirmation of the demand. The appellant argued that they excluded material value in invoices, and VAT returns supported this claim. The issue was whether the appellant sold materials during services and qualified for benefit under Notification No. 12/2003. The Tribunal found evidence in invoices and VAT returns indicating material value. They directed the appellant to submit all necessary documents for a fresh consideration by the adjudicating authority within three months. The appeal was allowed for remand, keeping all contentions open.