TMI Blog2014 (3) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... gross consideration received for rendering of service. The Commissioner has not considered these submissions made by the appellant and also the clarifications issued on the matter. Therefore, we are of the considered view that the matter has to go back to the adjudicating authority for fresh consideration. First of all, all the transactions involving only sale of spare parts should be excluded for the purpose of computation of service tax demand. Secondly, even in a case where the transaction involves both sale of spare parts and also rendering of service, the value of sale of spare parts should be excluded if sales tax/VAT liability has been discharged on such sales as is evident from the invoices/bills issued in this regard - Decided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with interest. Penalties were also imposed on the appellant under all the above sections and hence the appellant is before us. 3. The learned counsel for the appellant submits that the department has computed service tax demand on the basis of sales figures of spare parts reflected in their balance sheets for the respective years. The sale figure reflected in the balance sheet include sale of spare parts as such without any rendering of any service on which they had discharged sales tax/VAT liability. Further, sale of spare parts might also occur in the course of repair of motor vehicles. In such cases also they have disclosed the value of spare parts in the bills raised and have discharged sales tax liability on such sales. Since sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r providing the service and accordingly cost of such inputs forms integral part of the value of taxable service and 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 have been included in the bill. In view of this clarification, the learned Additional Commissioner (AR) submits that the claim of the department for service tax in the case of composite service, on the aggregate value including the value of spare parts sold in the course of rendering of service would be sustainable in law. 5. We have carefully considered the rival submissions. As the issue lies in a narrow compass, after dispensing with the requirement of pre-deposit, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above circular, it would appear that even in a case of composite transaction involving sale of goods and rendering of service, if the bill/invoices issued clearly shows payment of sales tax/VAT on the spare parts, then the value of such spare parts would not be includible in the gross consideration received for rendering of service. The Commissioner has not considered these submissions made by the appellant and also the clarifications issued on the matter. Therefore, we are of the considered view that the matter has to go back to the adjudicating authority for fresh consideration. First of all, all the transactions involving only sale of spare parts should be excluded for the purpose of computation of service tax demand. Secondly, even in a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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