2016 (1) TMI 769 - HC - Service Tax

Valuation - exclusion of cost of goods used for providing taxable services - where the goods were neither sold nor reflected in invoice, nor VAT is paid/discharged on it - Scope of Notification No.12/2003-ST dated 20.06.2003 - Held that - Having regard to the facts and circumstances of the case, following the Judgment of this court in Adlabs case 2010 (3) TMI 1087 - KARNATAKA HIGH COURT and for the reasons stated therein, the instant appeal is dismissed as not maintainable. In view of the appeal being dismissed as not maintainable, answering the substantial questions of law in this appeal does not arise.

Summary

Issues:
1. Claiming benefit of Notification No.12/2003-ST for goods not sold or reflected in invoice.
2. Invocation of extended period due to audit findings.

Analysis:

Issue 1:
The appeal questions the order passed by the Customs, Excise & Service Tax Appellate Tribunal, South Zonal Bench, Bengaluru, and seeks to uphold the Order passed in Appeal No.351/2012. The primary issue raised is whether the assessee can claim the benefit of Notification No.12/2003-ST dated 20.06.2003 for goods such as films and chemicals that were neither sold nor reflected in invoices, with no VAT paid on them. The appellant seeks clarification on whether such a contract should not be considered as 'service simplicitor' based on various judicial decisions, including those of the Hon'ble Supreme Court. The judgment refers to relevant cases such as C K JIDHEESH v/s. UOI, Rainbow Colour Lab Vs. State of M.P., BSNL Vs. Union of India, STO Vs. B.C. Kame, and S S Photographic Lab Pvt. Ltd., V/s. State of Assam & Ors.

Issue 2:
The second issue pertains to the invocation of the extended period in this case due to the discovery of infirmities during an audit. The respondent argues that the appeal is not maintainable, citing the Judgment of the division Bench of the court in the case of COMMISSIONER v. ADLABS. The appellant, in response, does not contest the law laid down by the court and the respondent's submission, suggesting that the appeal be disposed of in accordance with the said Judgment. Consequently, the court dismisses the appeal as not maintainable, following the precedent set in Adlabs' case and reserves the appellant's liberty to address their concerns before the appropriate forum if desired.