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2023 (8) TMI 409 - AT - Service TaxClassification of services - Repairs to Vehicle service or Works Contract - extended warranty plans - HELD THAT:- 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. VAT and Service tax are mutually exclusive levies. The present demand has sought to subject the entire value to service tax, despite the fact that the spare parts were subjected to VAT - Without prejudice, the Appellant is entitled to claim deduction on the value of goods and materials in terms of Notification No. 12/2003 – ST dated 20.06.2003 - Cum-tax benefit ought to be extended to the Appellant. - There can be no interest liability and penalty fastened on the Appellant. Appeal allowed.
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