TMI Blog2017 (1) TMI 1110X X X X Extracts X X X X X X X X Extracts X X X X ..... le services and specifically mentions that the same does not include the cost of parts or other material, if any, sold to the customer during the course of providing maintenance or repair service. On the very face of the language used in Section 67 of the Finance Act, 1994 we cannot subscribe to the view held by the Majority in the appellate Tribunal that in a contract of the kind under consideration there is no sale or deemed sale of the parts or other materials used in the execution of the contract of repairs and maintenance. The finding of the appellate Tribunal that it is the entire of the gross value of the service rendered that is liable to service tax, in our considered view, does not lay down the correct proposition of law which, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quires.-- * * * (105) 'taxable service' means any service provided- * * * (zzg) to a customer, by any person in relation to maintenance or repair; 3. The expression maintenance or repair is defined by Section 65(64) of the Finance Act, 1994 is in the following terms: 65. Definitions In this Chapter, unless the context otherwise requires.-- (1).... .... (64) management, maintenance or repair means any service provided by- (i) any person under a contract or an agreement; or (ii) a manufacturer or any person authorized by him, in relation to,-- (a) management of properties, whether immovable or not; (b) maintenance or repair of properties, whether immovabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on under section (66) of the said Act, subject to condition that there is documentary proof specifically indicating the value of the said goods and materials. 2. This notification shall come into force on the 1st day of July, 2003 (Notification No.12/2003-S.T. dated 20.6.2003)' CBEC Circular dated 7 t h April, 2004 'I am directed to refer to your representation forwarded to Finance Minister vide letter dated 11-3-2003 and state that in terms of the notification 12/2003-ST dated 20-6-2003, the exemption in respect of input material consumed/sold by the service provider to the service recipient while providing the taxable service is available. However, the exemption is available only if the service provider maintains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of cost of raw materials consumed in providing the impugned service. 8. Aggrieved, this appeal has been filed. 9. We have heard the learned counsels for the parties. 10. The exigibility of the component of the gross turnover of the assessee to service tax in respect of which the assessee had paid taxes under the local Act whereunder it was registered as a Works Contractor, would no longer be in doubt in view of the clear provisions of Section 67 of the Finance Act, 1994, as amended, which deals with the valuation of taxable services for charging service tax and specifically excludes the costs of parts or other material, if any, sold (deemed sale) to the customer while providing maintenance or repair service. This, in fact, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice; and thirdly the affidavit filed before this Court by one S. Subramanian, Commissioner of Central Excise, Salem. 12. No dispute has been raised with regard to the assessment of the appellant on its turnover under the local/State Act, insofar as payment of value added tax on that component (70%) is concerned. A reading of the show cause notice dated 24th January, 2008 would go to show that the entire thrust of the Department's case is the alleged liability of the appellant assessee to pay service tax on the gross value. In the aforesaid show cause notice, the details of the value of the goods, raw materials, parts, etc. and the value of the services rendered have been mentioned and service tax has been sought to be levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and misc. charges i.e. Labour charges separately in their invoices. However, on the follow-up action the customers of the Appellant revealed that they have neither purchased nor received raw materials intended for Retreading and they had paid only the Retreading charges for carrying out the Retreading activity. The invoices which the appellant assessee has also brought on record by way of illustration show the break up of the gross value received. There is again no contest to the same. Leaving aside the question that the case now projected, with regard to lack of proof of incurring of expenses on goods and materials which has been transferred to the recipient of the service provided, appears to be an afterthought, even on examination ..... X X X X Extracts X X X X X X X X Extracts X X X X
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