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TMI Blog2023 (8) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... rts from the manufacturer which are replaced during repair and for servicing. A contract which has both the elements of goods and service is a works contract. Hon ble Apex Court in COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT ], held that Works Contract is a separate species of contract distinct from contracts for services simpliciter recognized by the world of commerce and law as such and has to be taxed separately as such. Hence the impugned service has to be examined as a works contract with respect to its taxability. After the insertion of section 65B(54) in the Finance Act 1994, from 01.07.2012 onwards, the definition of works contract was expanded to include repair an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall be the total of such monetary consideration money-equivalent of the other non-money consideration. Hence the appellant was liable to pay service tax on the value of reimbursement of spares replaced during the warranty period. As the reimbursement received is to be included in the taxable value for payment of service tax, the appellant was charged for violating the provisions of section 67 and 68 of the Finance Act, 1994 r/w Rule 7 of Service Tax Rules, 1994. Hence Show Cause Notice was issued to the appellant proposing to demand service tax amount of Rs.3,21,363/- along with other adjudicatory liabilities. After due process of law, the original authority confirmed the demand of Rs.3,21,363/- along with interest and imposed penalty un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld in the case of Tata Motors Vs DCCT 2023-TIOL-66-SC that such reimbursements received by authorized service centers from automobile manufacturers is liable to VAT. Once a transaction is held to be sale, leviable to Sales Tax / VAT, Service Tax cannot be demanded on the same transactions as held in catena of decisions. Being a periodical demand, the ingredients required for imposition of penalty under Section 78 of the Act cannot at all be said to be present in this case. In the impugned order the Commissioner (Appeals) has refused to admit the evidence produced by the appellant in support of their claim for exemption under Notification 12/2003 S.T on the ground that the details were produced only before the appellant authority. But the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 65(105) (zzzza) of the Finance Act, 1994 which deals with the taxability of works contract from 01.06.2007, is reproduced below; "To any person, by any other person in relation to the execution of a works contract, excluding works contract in respect of roads, airports, railways, transport terminals, bridges, tunnels and dams. Explanation.-- For the purposes of this sub-clause, "works contract" means a contract wherein,-- (i) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out,-- (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een inserted by the Finance Act, 2012. In the new system all services, except those specified in the negative list, were subject to Service Tax. Subsequently Notification No. 19/2012 ST dated 05.06.2012 was issued specifying that the new Section 65B (Interpretations), among others, would be effective from 01/07/2012. Section 65B(54) defines 'works contract' as under; "works contract" means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of movable or immovable property or for ca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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