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2023 (8) TMI 1235 - CESTAT ALLAHABADDemand of Service Tax - value of material/spare parts sold by the Appellant during servicing of motor vehicles - Appellant has already deposited under the provisions of Uttar Pradesh Value Added Tax, 2008 on the value of such materials sold by them during servicing of motor vehicles - reverse charge mechanism - HELD THAT:- The issue is no more res integra as the same stands settled by the order of another Division Bench of this in the case of M/S. SAMTECH INDUSTRIES AND OTHERS VERSUS CCE. KANPUR AND OTHERS [2014 (4) TMI 995 - CESTAT NEW DELHI], wherein the assessee was providing the service of repairing transformer and was using consumables like transformer oil and also component parts being coil etc., the Tribunal held, in view of the fact that it is not disputed that in respect of the supply of goods, used for providing of service of repair, Sales Tax/VAT is paid, which fact is evident from the invoice on record. It was also observed that when the value of goods used is shown separately in the invoice and on the same Sales Tax/VAT has been paid, the supply of the goods would have to be treated as sale and the transaction which are sale cannot be a part of the service transaction. Accordingly, Service Tax is chargeable only on the services/labour charges and the value of the goods thereunder would not be includible in the assessable value. The demand of service tax against the Appellant for the cost of the goods supplied during repair/service does not appear to be sustainable. Accordingly, the demand, interest and the penalties imposed are set aside. Penalties under section 78 A of the Act upon Shri Devendra Pal Singh and Shri P. C. Suman, both directors of the Appellant company - HELD THAT:- On facts and under the circumstances of the case, ingredients to impose penalty under section 78 A of the Act does not exist. We therefore, propose to drop the penalty imposed under section 78 A on Shri Devendra Pal Singh and Shri P. C. Suman - penalty dropped. Appeal allowed.
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