2015 (2) TMI 972

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..... es tax/VAT liability is discharged on the value inclusive of the handling charges. Therefore, we do not understand how service tax levy would apply especially when the goods are subject to sales tax/VAT on a value inclusive of handling charges. It is not in dispute that the handling charges are incurred in connection with the procurement of the parts. If that be so they will obviously form part of the value of the goods when they are subsequently sold. - Section 67 of the Finance Act, 1994 mandate levy of Service Tax on a value or consideration received for rendering the services. Therefore, any consideration received for supply of goods is not covered within the scope of section 67. The decisions of the Tribunal in the case of Ketan Motors .....

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..... While reparing or servicing of the vehicles, they also sometimes used parts on which sales tax/VAT liability is discharged. The parts and components are procured from M/s Maruti Udyog Ltd. and they have lifted these parts from the warehouse/depots of Maruti Udyog Ltd. For bringing these parts into their service station, they have to incur octroi and other local taxes, freight, loading and unloading charges etc. Therefore, while selling these parts to the clients as part of servicing activity, they include the cost incurred by them towards freight, loading, unloading etc. as handling charges' and pay sales tax on the goods on the value inclusive of handling charges. Sometime they sell the parts as such without undertaking any service/r .....

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..... 2014(33)STR 165(Tri-Mum) and a few other decisions in support of the above contentions. Accordingly, it is prayed that the impugned demand be set aside. 3.2 The learned counsel also points out that the adjudicating authority had examined this matter at length in his order dated 13/03/2008 and had concluded that the handling charges are part of the sale value of the goods on which sales tax/VAT liability has been discharged and hence not leviable to sales tax. This also supports the proposition that the impugned demands are not sustainable. 4. The Dy. Commissioner (AR) appearing for the Revenue reiterates the findings of the Revisionary authority and submits that since the handling charges are service rendered, service tax is leviable .....

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