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2013 (11) TMI 1306 - AT - Service TaxValuation - Undervaluation of the service - retreading of tyres - Management, Maintenance or Repair Service - Appellant have filed returns and paid service tax on the labour component of the work done by them and not on the material component on which they have paid VAT - Held that:- as per the decision of apex court legal fiction, as is well known, should be applied only to the extent for which it was enacted. It, although must be given its full effect but the same would not mean that it should be applied beyond a point which was not contemplated by the legislature or which would lead to an anomaly or absurdity - Payments of service tax as also the VAT are mutually exclusive. Therefore, they should be held to be applicable having regard to the respective parameters of service tax and the sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract. It may consist of different elements providing for attracting different nature of levy. It is, therefore, difficult to hold that in a case of this nature, sales tax would be payable on the value of the entire contract; irrespective of the element of service provided. The approach of the assessing authority, to us, thus, appears to be correct - Ruling of the apex court in the case of Imagic Creative (2008 (1) TMI 2 - Supreme Court of India) was not considered by the Tribunal in Safety Retreading Co. case (2012 (6) TMI 719 - CESTAT, CHENNAI (THIRD MEMBER)) and further, we are in agreement with the law laid down by the Supreme Court in the case of Imagic Creative Private Ltd. There is a prima facie case made out in favour of the appellant and accordingly, there will be stay of the impugned demand of tax, interest and penalty till the final disposal of the appeal - Stay granted.
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