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2018 (3) TMI 1284 - AT - Service TaxValuation - includibility - value of materials supplied free of cost - Held that - it is an admitted fact that on the materials supplied by the appellant, VAT has been paid by the appellant in terms of N/N. 12/2003-ST dated 26.06.2003. Therefore, the appellant is not required to add the value of materials supplied by them in the assessable value of service provided by them - appeal allowed - decided in favor of appellant.
Issues:
- Whether the value of materials supplied free of cost should be added to the assessable value of services provided by the appellant. Analysis: The appellant, engaged in gold plating on various items, was faced with a demand for Service Tax on the value of gold used in their activity. The Revenue contended that the value of gold should be included in the assessable value of services provided. The appellant argued that they paid VAT on the gold used for plating separately, citing Notification No.12/2003-ST dated 26.06.2003, which exempted the value of gold from being added to the assessable value of services. The Revenue relied on a decision by the Hon'ble Larger Bench in another case, emphasizing that a composite invoice was issued in that case, making it difficult to ascertain the value of goods supplied. However, the Tribunal found the facts of the present case to be different. The appellant had paid VAT on the materials supplied, making it clear that the value of materials need not be added to the assessable value of services. Therefore, the Tribunal set aside the impugned order, noting that the appellant was not required to include the value of materials supplied in the assessable value of services. In conclusion, the Tribunal allowed the appeal filed by the appellant, providing consequential relief. The judgment clarified the applicability of Notification No.12/2003-ST and distinguished the case from the precedent cited by the Revenue, ultimately ruling in favor of the appellant based on the specific circumstances and legal provisions involved.
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