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TMI Blog2024 (11) TMI 993X X X X Extracts X X X X X X X X Extracts X X X X ..... biles [ 2023 (10) TMI 355 - CESTAT AHMEDABAD ] It is not in dispute that once the handling charges is part and parcel of the sale price of car and sales tax/VAT thereon has been paid, the same became a part and parcel of the sale value hence will not attract any service tax. Thus the service tax demand on the handling charges collected during the sale of the car as sale price of the car cannot be levied with service tax. Whether the handling charges is a part and parcel of the sale value of the goods and VAT was paid? - From the VAT assessment order, it is clear that the handling charges and warranty amount which was not earlier included in the sale value was included for the purpose of VAT assessment and VAT has been paid and thereafter, no VAT amount tax remains to be paid. With the above it is clear that the appellant have paid the VAT amount on the handling charges. Therefore, the above judgments which are on the facts that the handling charges is a part and parcel of the sale value and the same was suffered the VAT tax, directly applies in the facts of the present case as discussed above. AR raised point that this VAT assessment order were not presented before the lower author ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. V/s. CCE, Goa 2015 (38) S.T.R. 501 (Tri. - Mumbai) M/s Hoechst Pharmaceuticals Ltd. and Ors Vs. State of Bihar and Ors. reported in (1983) 4 SCC 45. Godfrey Philips India Ltd and Anr. Vs. State of UP and Ors reported in (2005) 2 SCC (515). Commissioner of Central Excise Customs, Kerela v Larsen Toubro Ltd. 2015 (39) STR 913 (S.C) Gujarat Ambuja Cements Ltd., v. Union of India, reported in 2005 (4) SCC 214 2.1 He further submits that the demand for extended period is not sustainable for the reason that the appellant have declared the handling charges in the sale invoice. Therefore, there is no suppression of fact. He placed reliance on the following judgments:- Cosmic Dye Chemical Vs. Collector of Central Excise, Bombay 1995 (75) ELT 721 (SC) CCE Vs. Chemphar Drug and Liniments 1989(40) ELT 276 (SC) Commissioner of Central Excise v E. Merck India Ltd., 2009 (238) E.L.T 386 (SC) Commissioner of Central Excise v Ishaan Research Lab (P) Ltd, 2008 (230) E.L.T 7 (SC) Chamundi Die Cast (P) Ltd. V Commissioner of Central Excise, 2007 (215) E.L.T. 169 (SC) Ugam Chand Bhandari v Commissioner of Central Excise, 2004 (167) E.L.T 491 (SC) Associated Pigments Ltd. V Superintendent of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to levy of sales tax/VAT. Whether a given transaction between the service station and the customer is a sale or not, is to be determined taking into account the real nature and material facts of the transaction. Payment of VAT/sales tax on a transaction indicates that the said transaction is treated as sale of goods. Any goods used in the course of providing service are to be treated as inputs used for providing 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 entire bill, including the value of the spare parts, raised by the service provider, namely, service stations. 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 services used as input services for servicing of vehicles. From the above clarification, it is absolutely clear that even during the course of servicing of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch spare parts and lubricants would not attract Service Tax. Moreover, in some of the judgments, even the fact that one common invoice was issued showing both service part and sale of spare parts with payment of VAT/sales tax, is absolutely same. In view of the above judgments, issue involved in the present case is squarely covered. Hence, the demand of Service Tax on the value of spare parts and lubricants is not sustainable in the present case. b) In the case of Jivan Jyot Motors (supra) this Tribunal has passed the following order: 5. On careful consideration of the submissions made by both the sides and perusal of record, without going into issue of classification, we find that there is no dispute that handling and forwarding charges which was charged by the appellant from customers is undisputedly a part of sale price. For ease of reference, sample copy of the sale invoice is scanned below : - 6. From the above invoice it can be seen that VAT 12.5% was calculated on the total value i.e. basic price plus handling and forwarding charges and paid to the concerned State authorities. In this fact, as per the above invoice, handling and forwarding charges nothing but part of the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ale 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 23-8-2007, it is stated that service tax is not leviable on a transaction treated as sale of goods and subjected to levy of sales tax/VAT. Whether a given transaction between the service station and the customer is a sale or not, is to be determined taking into account the real nature and material facts of the transaction. Payment of VAT/sales tax on a transaction indicates that the said transaction is treated as sale of goods . 5.3 From the reading of the above circular, it would appear that even in a case of composite transaction involving sale of goods and rendering of service, if the bill/invoices issued clearly shows payment of sales tax/VAT on the spare parts, then the value of such spare parts would not be includible in the gross consideration receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l relief, if any, in accordance with law. (c) in the case of CCE vs. Seva Automotive Pvt. Limited the Tribunal held as under:- 2. The respondent, M/s. Seva Automotive Pvt. Ltd. Nagpur, is registered as an authorised service station and rendering services as such and discharging service tax liability on their activities. While rendering the said services, the recipient also sells spare parts of automobiles. The spare parts were received from the manufacturers and the respondent charges handling charges for handling of these spare parts at 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cel of the sale price of car and sales tax/VAT thereon has been paid, the same became a part and parcel of the sale value hence will not attract any service tax. 4.1 Now we examine that whether in the facts of the present case is identical to the fact of the above case. In that regard we have to ascertain whether the handling charges is a part and parcel of the sale value of the goods and VAT was paid. In this regard, we scanned the sample invoice of car wherein, the handling charge was shown and collected from the customers: 4.2 From the above invoices, it is seen that though the appellant have charged the handling charges in the sale invoice but VAT was not paid on the handling charges. As per the submission of Ld. Counsel, later on the VAT department has raised objection that the handling charge is nothing but part and parcel of the sale value of the car and that proceeding has been concluded. In this regard, final assessment orders have been issued by VAT department, the english translation copy of the same is given below:- 4.3 From the above VAT assessment order, it is clear that the handling charges and warranty amount which was not earlier included in the sale value was incl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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