TMI Blog2012 (9) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax on the value received for service as per the existing provisions of section 67 of the Finance Act, 1994 read with provisions of notification 12/2003-ST. Therefore this is not a case for full waiver of pre-deposit of dues for admission of appeal. Pre-deposit of 50% ordered to be deposited within stipulated time – Decided against assessee - Service Tax Appeal No.449 of 2012 - ST/S/809/12-CUS - Dated:- 17-7-2012 - Archana Wadhwa, Mathew John, JJ. For Appellant: Shri Siladitya Sarkar, Const. For Respondent: Shri B L Soni, AR Per: Mathew John: The appellants entered into a contact with M/s Hindustan Zinc Ltd. for maintaining and repairing their heavy dumpers for a period of five years. As per the contract they were charging consideration from M/s Hindustan Zinc Ltd. under two heads-one charging for manpower and logistics and other charging for maintenance and repair. The appellants were paying service tax on consideration received under the former head but were not paying service tax for consideration received under the latter head. They were not paying service tax on maintenance and repair charges on the ground that they were paying VAT on such charges. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 to 15000 USD 36.00 INR 250/- 4. 15001 to 20000 USD 42.00 INR 250/- 5. 20001 to 25000 USD 10.00 INR 250/- 4. The contention of the appellants is that once they have paid VAT in respect of maintenance and repair charges which involved sale of goods, there cannot be any demand for service tax for the same amount. According to them the entire amount billed under the said contract was for supply of material. The only issue was that they had collected more amounts in the initial years of contract than the value of materials supplied during those years. But it is pointed out in later years they have supplied goods valued more than the consideration they have received for those years. He submits following tabulation to prove his argument:- Phase-I of Contract Year Spare Parts Supply Charges recovered Value of Spare Parts actually consumed (calculated at regular list price) Differential Value (in Rs.) (1) (2) (3) 4=(2)-(3) 1 (2004-05) 79,86,539 18,37,436 61,49,103 2 (2005-06) 2,92,02,780 70,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ales tax/VAT. Whether a given transaction between the service station and the customer is a sale or not, is to be determined taking into account the real nature and material facts of the transaction. Payment of VAT/sales tax on a transaction indicates that the said transaction is treated as sale of goods. Any goods used in the course of providing service are to be treated as inputs used for providing the service and accordingly, cost of such inputs form integral part of the value of the taxable service. Where spare parts are used by a service station for servicing of vehicles, service tax should be levied on the entire bill, including the value of the spare parts, raised by the service provider, namely, service stations. However, the service provider is entitled to take input credit of excise duty paid on such parts or any goods used in providing the service wherein value of such goods has been included in the bill. The service provider is also entitled to take input credit of service tax paid on any taxable services used as input services for servicing of vehicles. 8. According to the Counsel the fact that VAT is paid on the impugned consideration received is a good e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action indicates that the said transaction is treated as sale of goods." 11. The circular Itself says that the matter is to be considered in the facts of each case. The circular cannot be interpreted to mean that the service provider can pay VAT or service tax at his option. 12. We have considered arguments on both sides. 13. We are not able to see any ruling of any Court or Tribunal or any circular of CBEC to the effect that a service provider can pay service tax or VAT at his option. If option is given obviously the service provider will pay the tax which is levied at lower rate. The two levies are under separate provisions in the Constitution and the proceeds of such taxes are utilised for different purposes by different authorities. So the Tribunal has no power to say that tax due under one enactment can be discharged by paying tax under another enactment under a lower rate. In situations where there was difficulty in ascertaining the price of goods correctly, the Tribunal found it expedient to accept the value on which VAT was paid as an evidence of value of goods sold in the absence of evidence to the contrary. Thus is the crux of the decision in Wipro GE Medical Syst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter which can be examined during final hearing. 16. Further even after considering the excess value of materials sold under Phase-I contract for the period of dispute, there is a net higher realization than the price of materials sold as per list prices. 17. We are of the prima facie view that the impugned contract is for providing service and not for sale of goods, We are also of the view that a tax under Central enactment cannot be discharged by paying tax under a State enactment. In the facts of the case the appellants have not paid service tax on the value received for service as per the existing provisions of section 67 of the Finance Act, 1994 read with provisions of notification 12/2003-ST. There is not much merit in the argument that Revenue has not proved that the value realised is for services rendered and not for value of goods sold. This is because when the issue is raised by Revenue, it is for the appellants to prove the contrary at least while replying to show cause notice using facts and figures in their account books which are available to them easily but may not be easily available to Revenue. No such attempt is made. 18. Therefore this is not a case for f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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