2015 (2) TMI 972

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..... tax demand of Rs. 4,86,299/- along with interest thereon apart from imposing penalties under sections 76, 77 and 78 of the Finance Act, 1994 on the appellant, M/s Automotive Manufacturers Private Ltd., Nagpur by setting aside the order of the adjudicating authority vide order no. 90/STC/2007-08 dated 13/03/2008. Aggrieved of the same, the appellant is before us. 3. The learned counsel for the appellant submits that the appellant is an authorised dealer of Maruti Udyog Ltd., and are registered with the department as an authorised service station for Maruti cars and they have been discharging service tax liability on servicing/repairing of the vehicles undertaken by them. While reparing or servicing of the vehicles, they also sometimes used .....

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..... r no. 96/7/2007-ST dated 23/08/2007 it has been clarified that service tax is not leviable on a transaction treated as a sale of goods and subject to levy of sales tax/VAT when spare parts are sold by a service station during the servicing of vehicles. Even otherwise, what is liable to service tax is only the consideration received for servicing of the vehicles and not the consideration received for sale of goods. Therefore, the impugned demands are not sustainable. 3.1 Reliance is placed on the decisions of this Tribunal in the case of Dynamic Motors 2012 (26) S.T.R. 145 (Tri. - Del.), Ketan Motors Ltd. Vs. Commissioner of Customs, Central Excise & Service Tax, Nagpur 2014(33)STR 165(Tri-Mum) and a few other decisions in support of the ab .....

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..... e that the handling charges are incurred in connection with the procurement of the parts. If that be so they will obviously form part of the value of the goods when they are subsequently sold. 5.1 Section 67 of the Finance Act, 1994 mandate levy of Service Tax on a value or consideration received for rendering the services. Therefore, any consideration received for supply of goods is not covered within the scope of section 67. The decisions of the Tribunal in the case of Ketan Motors Ltd. and Dynamic Motors cited supra also support this view. 6. Accordingly, the impugned order is clearly unsustainable in law and, therefore, the same is set aside with consequential relief, if any, in accordance with law. (Pronounced in Court)
Case law .....

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