2025 (1) TMI 343 - AT - Service Tax

Levy of service tax - Business Auxiliary Service - act of selling / supplying bought out goods (spares) by the appellant to the buyers, while selling drilling rigs and ancillary equipment produced - HELD THAT - Reliance placed in the case of LMP PRECISION ENGINEERING CO P LTD VERSUS C.C.E S.T. -VALSAD 2024 (5) TMI 777 - CESTAT AHMEDABAD , where it was held that 'A simple requisition by the customer of the spare parts as may be required by them and delivering the same by them was as per contractual requirement or warranty obligation by the appellant. It would not tend to bring the transaction within the ambit of Business Auxiliary Service .' Conclusion - The act of selling / supplying bought out goods (spares) by the appellant to the buyers, while selling drilling rigs and ancillary equipment produced, does not come within the ambit of Business Auxiliary Service. Appeal allowed.

Summary

The Appellate Tribunal CESTAT Ahmedabad, comprising Mr. Ramesh Nair (Judicial) and Mr. C. L. Mahar (Technical), addressed whether service tax is applicable on the sale or supply of bought-out goods (spares) by the appellant while selling drilling rigs and ancillary equipment, under the "Business Auxiliary Service" category. The appellant, represented by Shri Saurabh Dixit, argued that similar issues in the appellant's previous cases were resolved in their favor, as seen in Lmp Precision Engineering Company Pvt Ltd Vs. CCE & ST - Daman (2017) and Lmp Precision Engineering Company Pvt Ltd Vs. CCE & ST Valsad (2024). The respondent, represented by Shri N G Makwana, acknowledged that these precedents apply. The Tribunal confirmed that the issue is "no longer res integra" and settled in favor of the appellant, thereby setting aside the impugned orders. The appeals were allowed, with the decision pronounced on December 10, 2024.