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2009 (1) TMI 172 - AT - Service TaxThe demand is raised on the basis of Circular No.87/05/06-ST dated 06.11.2006 issued by the CBEC. This circular had clarified that where service charges are reimbursed by the vehicle manufacturers, such reimbursement should be subject to service tax. The lower authorities had rejected the claim of the appellants that they were not paid any charges for the free services rendered either by the manufacturer of the vehicles or by the purchaser of the vehicles - the tax was demanded on the margin earned by then on sale of the vehicles as they collected no charges for the first three services – held that no service tax can be levied on th¸wamount representing the dealers’ margin or any part of it which already has been subjected to sales tax – demand set aside.
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