2015 (1) TMI 185

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..... ition hearing. Accordingly, after disposing the stay applications, we take up the appeals for hearing. 3. After hearing both sides and on perusal of records, we find that appellants are engaged in the business of retreading of old and used tyres. There is a demand of service tax along with interest and penalty under the category of "management, maintenance or repair service". Ld. Advocate on behalf of the applicants drew the attention of the Bench, the relevant portion of the Order-in-Original No.10./2013 (ST-ADC) dt. 28.2.2013, wherein it is observed that the appellants paid the service tax representing labour charges. Thus there is a demand of tax on the material portion alone. It is seen from the said adjudication order that the appella .....

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..... The aforesaid judgments and discussion highlight the following facets/principles :        (1) After 46th Amendment to the Constitution, composite contracts can be bifurcated to compute value of the goods sold/supplied in contracts for construction of buildings with labour and material. The service portion of the composite contracts can be made subject matter of service tax. Aspect doctrine is applied for bifurcating/vivisect the composite contract.       (2) Service tax can be levied on the service component of any contract involving service with sale of goods, etc. Computation of service component is a matter of detail and not a matter relating to validity of imposition of service ta .....

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..... reason, provided it is optional.       (7) Authorities cannot compel and force an assessee to accept the notifications in question and pay tax accordingly, as seeking coverage under the notification is voluntary. An assessee can state that the service component of a composite contract should be computed in a fair and reasonable manner and accordingly taxed.      (8) The notifications meet the tests laid down under Sections 93 and 94 of the Act because they relate to manner and mode of computation of service tax in a composite contract. The object and purpose is not to tax as non-service element or to include non-taxable part of the composite contracts.      (9) It has not b .....

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