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TMI Blog2023 (7) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... at some part of the value represent to the sale of goods and some part towards service. Once on total value the VAT is paid then on any part of such value service tax cannot be demanded. From the principle laid-down by Hon ble Supreme Court in the case of CST vs. UFO Moviez India Limited [ 2022 (7) TMI 1064 - SUPREME COURT ], it is settled that when VAT has been paid on the sale of goods, the question to claim service tax thereon does not arise. Even in the worse situation in various cases where the parts and components were used in repair and maintenance of motor vehicle even then merely because the part so used in repairs and maintenance were separately billed and VAT was paid thereon, the Tribunal held that on value of such parts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the show cause notice is confusing inasmuch as that it could not conclude that whether the activity handling and forwarding charges is falling under the category of Business Auxiliary Service or Business Support Service, for this reason itself the show cause notice is ab-initio void and not legal hence, the demand is not sustainable. Without prejudice, he further submits that handling and forwarding charges is part of the total sale value of the goods on which VAT was paid by the appellant, therefore any element which is part of the sale on which VAT is paid, service tax cannot be charged on the said activity. He placed reliance on the following judgments:- (a) CST vs. UFO Moviez India Limited - 2022-VIL-07-SC-ST (b) CST vs. UF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities. In this fact, as per the above invoice, handling and forwarding charges nothing but part of the sale value of the vehicle sold by the appellant to their customer. It is obvious that sale value consists of various elements and the same cannot be vivisected to contend that some part of the value represent to the sale of goods and some part towards service. Once on total value the VAT is paid then on any part of such value service tax cannot be demanded. This legal proposition affirmed by Hon ble Supreme Court in the case of CST vs. UFO Moviez India Limited - 2022-VIL-07-SC-ST (in Civil Appeal No. 181 of 2022 dated 06.01.2022) wherein the Hon ble Supreme Court has passed the following order:- In the facts of the present case as it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of motor vehicles for the period 2006-07 to 2010-11; (ii) Copy of Balance Sheet, Profit Loss Account for the year 2006-07 to 2009-10; and (iii) Copy of ST-3 returns for the period 2006-07 to 2010-11. 5.2 However, while confirming the demand, the learned Commissioner has taken the value of sale of spare parts as reflected in the balance sheets. This is incorrect. If a transaction involves only sale of spare parts, the question of levying service tax would not arise at all and therefore, the Commissioner should have excluded those transactions involving pure sale of spare parts. As regards levy of service tax on transactions involving both sale of spare parts as also rendering of service in the Master Circular dated 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed to produce before the adjudicating authority all the evidences they would like to rely upon in support of their above contention. (b) In Automotive Manufacturers P. Limited the Tribunal passed the following order:- 5. We have carefully considered he submissions made by both the sides. We notice that the appellant are charging handling charges whenever automobile parts are sold either independently or part of the service and repair of automobiles. In both the situations, invoice are issued for the sale of the goods as well as for collection of service charges for the services rendered. Handling charges were incurred in connection with the procurement of the goods and are included in the value of the goods sold and sales t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t their service stations. The Revenue was of the view that the handling charges for the spare parts should form part of the taxable value of the service rendered by the appellants. Accordingly, a notice dated 16-2-2005 was issued demanding service tax of Rs. 2,52,543/- for the period July, 2001 to February, 2004. The said demand was confirmed vide order dated 18-5-2006. Against this, the respondent preferred an appeal before the lower appellate authority. The lower appellate authority noted that in the case of authorised service stations, the cost of the spare parts are not to be included in the value of the services rendered as per Section 67 of the Finance Act, 1994, as it stood at the relevant time, since the cost of spare parts itself i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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