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TMI Blog2004 (11) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... automation supplied by it or other company, and on these maintenance services the company did not pay any tax. The case of the company is that the maintenance service contract entered into by it with the customers are purely labour and service contract and in course of executing such contract, if necessary, certain parts are replaced and the worn out or defective parts become the property of the petitioner-company and thereby there is no transfer in the goods from the petitioner-company to the customers. The maintenance service undertaken by the petitioner is in respect of fax machine and copier machine, which is not included in Schedule VI of the Act. The business premises of the petitioner-company was inspected by the Inspector of Taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies offering new cars, T.Vs, fridge, etc., in exchange of old cars, TVs, etc. Does it mean that such purchases do not attract tax liability and they are not sale? 4.. Dr. Saraf, learned Senior Counsel for the petitioner, however, submits that the main essence of the contract is providing the labour and service to see that the fax/copier machine remain serviceable throughout the year and in order to keep the machine workable throughout the year, if some small parts are supplied or provided in-between, it will not amount to sale of goods, as the costs of supplying parts is minimal and the main component is the labour and service provided by the company. Learned counsel has placed reliance on the observations of the apex Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wo types (i) Where the supplier provides labour and service and its expertise only; (ii) where along with the labour and service the supplier undertakes to provide the necessary spare parts. In the second case the supply of spare parts is on the basis of costs to costs, i.e., the receiving company undertakes to pay separately for the spare parts, if required to be supplied by the supplier or in the alternative the customer may procure from open market. Secondly, the supplier company undertakes to include the costs of all spare parts, wherein the risk is with the supplier company; in a given case, during the whole year the supplier company may not have to spend anything on account of the spare parts or in a given case, he may have to spend s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equipment or necessary part of any of the aforesaid items; or (iv) the fitting out or fabrication, assembling, altering, or reassembling, blending, furnishing, improving, processing or otherwise treating or adapting any goods; and (v) the supply of goods and provision of know-how, designs, labour-supervision inspection, training or other services in connection with any of the operations mentioned in sub-clauses (i) to (iv) above. " 7.. The alternate submission of the learned counsel for the petitioner is that all types of works contract have not been made exigible to tax under the Act. The types of works contract which are made taxable are provided in Schedule VI of the Act. On perusal of the items mentioned therein at Sl. Nos. 1 to 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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