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2020 (6) TMI 124 - AT - Service TaxBenefit of Exemption N/N. 12/2003-S.T. dated 20.06.2003 - value of the material i.e. tread rubber etc. used in providing the service of retreading of old and used tyre under the service head of “Management, maintenance or repair” - the contention of the learned Commissioner (Appeals) is that since the material used in retreading has been consumed therefore the appellant will not get exemption - HELD THAT:- This contention of learned Commissioner (Appeals) is solely based on the Tribunal Chennai’s judgment in the case of Safety Retreading Company [2012 (6) TMI 719 - CESTAT, CHENNAI (THIRD MEMBER)]. However this Tribunal judgment was reversed by the Hon’ble Supreme Court as reported at Safety Retreading Company (P) Limited vs. Commissioner of C.Ex. Salem [2017 (1) TMI 1110 - SUPREME COURT] wherein the Apex court considering the identical facts in as much as the tread rubber was used for retreading, has held that the value of such tread rubber is not liable to service tax. Therefore in view of this Apex Court judgment the dispute in hand came to rest and it is not res integra. As regard the clubbing of value of material sold by M/s Perfect Rubber, the material cost is not includible in the gross value of service of retreading. Moreover, the Perfect rubber is an independent proprietory concern and sale of goods by them is not in dispute. There are no reason for clubbing of value of goods sold by M/s Perfect Rubber in the value of the appellant M/s Perfect Re-treads. Therefore this reason also the value of material sold by M/s. Perfect Rubber cannot be included in the value of M/s Perfect Re-treads. Simultaneous penalty u/s 76 and 78 of FA - HELD THAT:- The Jurisdictional Hon’ble High Court of Gujarat in the case of Raval Trading Company vs. CST [2016 (2) TMI 172 - GUJARAT HIGH COURT] held that once the penalty under Section 78 has been imposed, penalty under Section 76 cannot be imposed. The penalty under Section 76 is set aside - Since the issue relates to interpretation of Notification No.12/03-ST, the penalty under section 78 is not imposable invoking Section 80 0f the Finance Act, 1994. Accordingly, the penalty imposed under Section 78 is also set aside. Appeal allowed - decided in favor of appellant.
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