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TMI Blog2023 (7) TMI 1120X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically indicating value of the goods, the demand of Service Tax against the assessee for the cost of the goods supplied during repair does not appear sustainable. The issue is already settled hence, the same is no more res-integra - Appeal allowed. - Service Tax Appeal No. 13116 of 2013 - Final Order No. A/ 11535 /2023 - Dated:- 14-7-2023 - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. C. L. MAHAR Shri M. G Yajnik , Advocate appeared for the Appellant Shri Himanshu P Shrimali , Superintendent ( AR ) for the Respondent ORDER RAMESH NAIR The brief facts of the case are that the appellants are running the various service stations of Mahindra Mahindra while providing services to the Vehicles of the Customers. They raise invoices for servicing and separately for the consumables such as Lubricating Engines Oil or parts etc. As regard, the service bill they discharge service tax under the Finance Act, 1994 and in respect of sale of consumables they charge state VAT and paid to the State VAT Department. The case of the department is that since the consumables were used for providing the service to various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Value) Rules, 2006 read with Section 67 of the FA read with C.B.E. C. Circular No. 96/8/2007-Service Tax. Further it appeared to revenue that the C.B.E. C. Circular No. 87/05/2006-Service Tax clarified that in respect of spare parts and consumables, which have been consumed during the process and are not available for sale, for availing such exemption in terms of Notification No. 12/2003-S.T., the goods must be sold and consequently they must be available for sale. It further appeared to Revenue that whether spare parts or consumables are consumed during the servicing of the vehicles, the Service Tax is to be discharged on entire amount of invoice/bills including the value of spare parts raised by the party against the servicing of vehicles. It was further observed in the show cause notice that where the party is liable to pay Service Tax on the entire invoices/bills raised by them, then by virtue of Notification No. 12/03-S.T. exemption is available to the extent of value of the goods and materials sold by the service provider to the service recipient, subject to the documentary proof of such sale exists and no credit of Central Excise duty paid on consumables and spares ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that in respect of the supply of goods, used for providing of service of repair, Sales Tax/VAT is paid, which fact is evident from the invoice on record. It was also observed that when the value of goods used is shown separately in the invoice and on the same Sales Tax/VAT has been paid, the supply of the goods would have to be treated as sale and the transaction which are sale cannot be a part of the service transaction. Accordingly, Service Tax is chargeable only on the services/labour charges and the value of the goods thereunder would not be includible in the assessable value. The Tribunal further observed that Rule 5(1) of Service Tax (Determination of Value) Rules, 2006 has been struck down as ultra vires, the provisions of Sections 66 67 of the Finance Act by the Hon ble Delhi High Court in the case of Intercontinental Consultants Technocrats Pvt. Ltd. v. Union of India Others - 2013 (29) S.T.R. 9 (Del.), it is categorically held that the value of goods used for providing the services which have been shown separately in the invoice, on which Sales Tax/VAT has been paid, cannot be included in assessable value and no Service Tax can be charged on the same. 6.1 T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the Bench, as regards the matter has been settled in view of the Board‟s letter dated 27-9-2013, the learned DR submits that the Tribunal may pass appropriate order. 8. Having considered the rival contentions and in view of the settled legal position in the case of Samtech Industries (supra), upholding the order of this Tribunal by the Hon ble High Court of Allahabad and also in view of the letter of the C.B.E. C. accepted the legal position that the cost of items supplied/sold and there is documentary proof specifically indicating value of the goods, the demand of Service Tax against the assessee for the cost of the goods supplied during repair does not appear sustainable. In this view of the matter, we set aside the impugned order and allow the appeal with consequential benefits. 9. The stay application is also stand disposed of. Commr.C.Ex., ST., Meerut- II Vs. Krishna Swaroop Agarwal 2015 (37) STR 647 (Tri. Del) The Revenue has filed this appeal against Order-in-Appeal No. 194-ST/MRT-II, dated 31-7-2011 which set aside the Order-in-Original No. 13/ADDL. COMM./M-II/2012, dated 19-4-2012. 2. The facts, briefly stated, are as under : M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viding the service and accordingly, cost of such inputs form integral part of the value of the taxable service . Where Spare parts are used by a service station for servicing of vehicles, Service Tax should be levied on the spare parts, including the value of the spare parts, raised by service provider, namely, service station. However, the service provider is entitled to take input credit of Excise Duty paid on such parts or any goods used in providing the service wherein value of such goods has been included in the bill. The service provider is also entitled to take input credit of Service Tax paid on any taxable service used as inputs service for servicing of vehicles. (ii) The respondent did not show proof of sale of spare parts to the service recipients. (iii) The Notification No. 12/2003-S.T. is not applicable as the value of spare parts/accessories is includible in the assessable value. 4. We have considered the facts of the case. The Board Circular referred to above in effect actually states that Service Tax is not leviable on the transaction treated as sale of goods and subjected to levy of sales tax/VAT. It is seen that as recorded by the Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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