2019 (3) TMI 2081 - AT - Service Tax

Valuation - non-addition of the cost incurred by the appellant for replacement/repairs undertaken by them of damaged parts of containers used in international transportation in the taxable value - HELD THAT - The matter is fully covered by the appellant s own case 2018 (4) TMI 1035 - CESTAT CHENNAI where it was held that Hon ble Supreme Court in Jain Brothers 2012 (7) TMI 935 - SUPREME COURT to state that the cost of goods supplied during repair cannot be added to the value of the taxable service in view of the said exemption. Appeal allowed.

Summary

The judgment from the Appellate Tribunal CESTAT Chennai, presided over by Hon'ble Ms. Sulekha Beevi C.S. and Hon'ble Mr. Madhu Mohan Damodhar, concerns the non-addition of costs for replacement/repairs of damaged container parts used in international transportation to the taxable value. The appellant, represented by Shri G. Thangaraj, argued that these costs should not be included, referencing a prior decision in their favor (Final Order No. 43447/2017).The Tribunal reiterated the findings from the previous order, which established that the appellant's services, categorized as 'Repair and Maintenance Service' for sea containers, are covered by a Customs Bond for re-export. The lower authority had denied exemption due to a lack of evidence supporting the sale of goods during repairs. However, the Tribunal found that invoices provided by the appellant detailed the repair charges, container numbers, labor, and material costs, and indicated the service tax on labor.The Tribunal referenced a Board clarification and a Supreme Court decision (Jain Brothers, 2012) that the cost of goods supplied during repair services should not be added to the taxable service value due to an exemption. The Tribunal noted that similar demands were dropped in the appellant's other cases in Tuticorin and Cochin.Concluding that there were no new grounds to deviate from the established ratio, the Tribunal set aside the impugned order and allowed the appeal with consequential benefits as per law.