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TMI Blog2020 (6) TMI 124X X X X Extracts X X X X X X X X Extracts X X X X ..... r (Appeals) is solely based on the Tribunal Chennai s judgment in the case of Safety Retreading Company [ 2012 (6) TMI 719 - CESTAT, CHENNAI (THIRD MEMBER) ]. However this Tribunal judgment was reversed by the Hon ble Supreme Court as reported at Safety Retreading Company (P) Limited vs. Commissioner of C.Ex. Salem [ 2017 (1) TMI 1110 - SUPREME COURT ] wherein the Apex court considering the identical facts in as much as the tread rubber was used for retreading, has held that the value of such tread rubber is not liable to service tax. Therefore in view of this Apex Court judgment the dispute in hand came to rest and it is not res integra. As regard the clubbing of value of material sold by M/s Perfect Rubber, the material cost is not includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... registration under the head of Management, maintenance or repair service and undertake to pay service tax only on service charges i.e. labour charges and in respect of material used, they claim exemption notification No.12/2003-S.T. dated 20.06.2003. Department issued show cause notices proposing denial of exemption notification No. 12/03-ST and consequential demand of excise duty on the total value i.e. material cost plus labour charges. The adjudicating authority confirmed the demand along with interest and also imposed penalties under Section 76 and 78 of the Finance Act, 1994. Being aggrieved by the orders-in-original, the appellants filed appeals before the Commissioner (Appeals) who, except reducing a portion of the penalty under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have heard both sides and perused the records. The main issue involved in both the appeals is that whether the appellants are entitled for the exemption Notification No.12/03-ST in respect of the value of the material i.e. tread rubber etc. used in providing the service of retreading of old and used tyre under the service head of Management, maintenance or repair . The learned Commissioner (Appeals) denied the exemption on the ground that the material on which the exemption was claimed gets consumed during the process of retreading of tyre and as per judgment of Tribunal in the case of Safety Retreading Company (P) Limited- 2012 (26) STR 25 (Tri.-Chennai) the appellant are not entitle for the exemption. He also held that the quantity of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd it is not res integra. As regard the clubbing of value of material sold by M/s Perfect Rubber, firstly as per our above discussion, the material cost is not includible in the gross value of service of retreading. Moreover, the Perfect rubber is an independent proprietory concern and sale of goods by them is not in dispute. We do not find any reason for clubbing of value of goods sold by M/s Perfect Rubber in the value of the appellant M/s Perfect Re-treads. Therefore this reason also the value of material sold by M/s. Perfect Rubber cannot be included in the value of M/s Perfect Re-treads. As regard penalties simultaneously under Section 76 and 78, the Jurisdictional Hon ble High Court of Gujarat in the case of Raval Trading Company vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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