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2023 (8) TMI 408 - AT - Service TaxClassification of services - service rendered during the warranty period will be liable to tax under Repairs to Vehicle service as per Section 106(65)(zo) which was introduced from 16/07/2001 or as a Works Contract - period from April 2011 to March 2012 - violation of provisions of section 67 and 68 of the Finance Act, 1994 r/w Rule 7 of Service Tax Rules, 1994 - HELD THAT:- The demand of service tax is on the amount claimed by the appellant towards reimbursement of parts 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 and maintenance services of movable properties also. Hence, the composite contracts for repair and maintenance of motor vehicles are leviable to service tax from 01.07.2012 onwards. The demand in the impugned order pertains to the period from April 2011 to March 2012. Since it is held that the composite contracts for repair and maintenance of motor vehicles are leviable to service tax from 01.07.2012 onwards, the demand does not sustain. Appeal allowed.
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