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TMI Blog2012 (7) TMI 780X X X X Extracts X X X X X X X X Extracts X X X X ..... aintenance and repair services to Arvind Mills including supply of spare parts required in this connection under this contract, as per the terms and conditions mentioned in the contract, The respondent had obtained Service Tax Registration under the category of 'Maintenance or Repair Services' on 28.10.2004 and paid service tax in respect of the maintenance fees after deducting the value of spare parts supplied by the respondent. Such deduction is permitted under the Notification No.12/2003-ST dated 20.6.2003, which grants exemption from service tax on so much of the value of taxable services as is equal to the value of the goods and materials sold by the service provider to the recipient of service. Revenue took a view that respondent was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ills Limited to the assessee, is inclusive of spare parts and operational spare parts. According to clause 5.3 of the contract, the assessee is required to replace the parts free of charge and therefore, spare parts were not sold by the assessee and hence, value of the same is required to be included. 3. On the other hand, learned advocate for the respondents submitted the photographs of gas turbines and power plant to show that; gas turbines are huge and embedded in earth and just because the term equipment has been used in the contract, it does not mean that turbine is not immovable property. He relied upon the decision of the Hon'ble Supreme Court in the case of TTG Industries Limited (Madras) Manu/SC/0459/2004 to submit t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o takes up responsibility of customs clearance of the spare parts. Thereafter, he submits that the invoices for value of spare parts are raised by the local company, The value of the spare parts is part of the total contract value which is the normal trade practice. He draws cur attention to the procedure followed in the works contract wherein the value of the goods which are sold, VAT is charged. In this case, no VAT is charged since the goods are directly imported by M/s Arvind Mills and sale of the goods takes place between Company Hqrs and Arvind Mills and it is a direct international deal. But the fact remains that spare parts are actually sold. He submits that just because the contract says that replacement of the spare parts would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot payable, the question of excluding the value of spare parts does not arise and on that ground, he has set-aside the order. 5. The only ground on the basis of which the Revenue has taken a stand that what service is provided is in respect of immovable property is that appellants themselves have used the word equipment in the contract and further, the service was provided in respect of gas turbines whereas the Commissioner in the impugned order has considered the services provided in respect of power plant, There is no dispute that the turbines are part of power plant. But contrary to the stand taken by the Revenue, the turbines are erected on site and from the photographs which were produced before us, it becomes quite clear that they we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the genuineness of the invoices for arriving at the value of imported goods. Having accepted the invoice submitted at the time of import and having determined the transaction value at that time, if the department makes a claim that spare parts have not been sold, it will not be acceptable unless it is shown that the transaction value was rejected and arrived at on some other basis or before the Customs it was declared that there were no sale. No such evidence has been placed before us nor does it form a part of memo of appeal. The very fact of existence of transaction value at the time of import and issue of invoice by a local party to M/s. Arvind Mills would go to show that there was a sale of spare parts and value of spare parts form a p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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