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2013 (7) TMI 265 - AT - Service TaxAuthorized service station - valuation inclusions under section 67 - value of spare parts supplied Held that - For authorized service stations, the cost of the spare parts and cost of handling of spare parts are not to be included in the value of the services rendered thus they will not form part of the services rendered appeal decided against the revenue.
Issues:
Interpretation of taxable value for services rendered by authorized service stations including handling charges for spare parts. Analysis: The case involved an appeal by the Revenue against an Order-in-Appeal passed by the Commissioner of Central Excise (Appeals), Nagpur. The respondent, a registered 'authorized service station,' was providing services and selling spare parts of automobiles. The Revenue contended that handling charges for spare parts should be included in the taxable value of the services provided. A notice was issued demanding service tax for a specific period. The lower appellate authority ruled in favor of the respondent, stating that as per section 67 of the Finance Act, 1994, the cost of spare parts should not be included in the value of services rendered by authorized service stations. Consequently, handling charges for spare parts would also not be part of the taxable value. The Revenue appealed this decision. The Revenue reiterated that handling charges for spare parts should be considered in the taxable value of services provided. On the other hand, the respondent's counsel supported the lower appellate authority's decision. The Tribunal carefully reviewed the arguments presented by both sides. The Tribunal noted that section 67 at the relevant time excluded the cost of spare parts sold during the repair services of automobiles. Therefore, the cost of handling spare parts incurred by the respondent should not be included in the taxable value of the services rendered. Consequently, the Tribunal found no fault in the lower appellate authority's reasoning and dismissed the Revenue's appeal for lacking merit.
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