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2020 (4) TMI 103 - AT - Service TaxValuation - repair and servicing of ‘earthmoving equipment’ - free supply of goods by recipient of service - separate invoicing of the materials utilised in rendering the service - to be included in assessable value or not - section 67 of Finance Act, 1994 as clarified in circular no. 96/7/2007-ST dated 23th August 2007 of Central Board of Excise & Customs - HELD THAT:- In the present instance, it is not in doubt that goods have been transferred to the recipient of the service; it is the incorporation of the goods within the article that has been subject to the service, and the ramifications thereof, that is. In the context of judicially determined mutuality, the extent to which section 67 of Finance Act, 1994 can be stretched is the crux of resolution. The jurisdictional competence to enforce VAT liability excludes us, as well as the adjudicator, from authority to ascertain the discharge of tax liability on the ‘goods’ component of the impugned transactions. The adjudicating authority has, thus, erred in presuming to the contrary in the absence of particulars in the invoices. The supply of ‘consumables’ by the recipient does not constitute ‘consideration’ to which value was required to be assigned for enhancing the ‘gross amount charged’ in section 67 of Finance Act, 1994. Neither the circulars of Central Board of Excise & Customs, advising the inclusion of all expenditure incurred for rendering services, nor the expansion of ‘consideration’ to encompass ‘consumables’, that does not add to the assets of the provider of service, have sanction of law. The differential tax confirmed in the impugned order cannot be sustained. Appeal allowed - decided in favor of appellant.
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