Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

TMI Blog

Home

2017 (4) TMI 501

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... en sold. Therefore, the entire value is exempt in terms of Notification No. 12/2003-S.T. In respect of transactions where contracts create an obligation on the appellants to provide spares, we set-aside the impugned order and remand the case to Commissioner (Appeals) to answer the question regarding availability of Notification No. 12/2003-ST or otherwise. In respect of transactions where there is no such obligation in the contract, the demand is set-aside. - Matter remanded back. - ST/10616/2014 - A/10744/2017 - Dated:- 7-4-2017 - Dr. D. M. Misra, Member (Judicial) And Mr. Raju, Member (Technical) For Appellant : Shri H. G. Dharmadhikari, Advocate For Respondent : Shri Sameer Chitkara, Authorised Representative ORDER .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... e demand was raised on the entire value of ₹ 17,82,56,001/- and the same was confirmed by the Commissioner. Aggrieved by the said order, the appellants are before Tribunal. 2. Ld. Counsel for the appellant argued that they enter into different agreements with their clients to whom they supply rig machines. He produced an agreement with the Chief Engineer, Minor Irrigation Department, U. P. Lucknow, where they had supply for Direct Circulatory Rotary Rig Machines with operating equipments to Minor Irrigation Department. Clause 11 of the said agreement required them to ensure supply of spares parts required by their client for the life time of the machines. The said agreement also provided a clause pertaining to breach of contract, w .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... he entire value of the transaction on which service tax has been demanded. 3. Ld. AR for the Revenue argued that the statement of service of procurement involved of procurement of goods is in the instant case, as the appellants have undertaken to ensure life time supply of spare to their clients. He relied on the decision of Tribunal in the case of Jain Marketing vs. Commissioner of Service Tax, Chennai 2011 (21) STR 532 (Tri.-Chennai) wherein following has been observed:- 3. It cannot be disputed that the assessee is a commercial concern, which provides Business Auxiliary Services relating to procurement of goods (fabrics) which are inputs for the client M/s. Hasbro Clothing Pvt. Ltd. The proviso covers seven categories of bu .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... there is no doubt that the appellants are purchasing the spares from the various sources. The appellants are also clearing the said spares to their clients on payment of VAT of the entire value of the goods. In one contract produced before us they have given a guarantee to ensure life time supply of spares. However in other contracts there is no such guarantee. In those contracts, the appellants are under no obligation no supply spares. In the contracts where there is no such guarantee to ensure supply of spares it has to be treated as the pure sale transaction. 5. In the cases where the appellants are providing a guaranty to ensure the life time supply of spares there can be doubt regarding the element of service involved in the transac .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... if during the provision of the services any goods are sold the value of such sales is excluded from the value of the services. Ld. Counsel has argued that in the instant case, the value on which service tax has been demanded is the same value at which the goods have been sold. Therefore, the entire value is exempt in terms of Notification No.12/2003-S.T. In this regard, the CBEC Vide Circular No.B2/8/2004-TRU dated 10.09.2004 is clarified as follows:- 24. Restriction on availment of credits and exemptions towards goods sold, in cases where abatements are allowed : In 24.1 cases of specified services, like tour operators, rent-a-cab, mandap-keeper providing catering services, erection, commissioning and installation etc., abatement .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

 

 

 

 

Quick Updates:Latest Updates