TMI Blog2018 (6) TMI 793X X X X Extracts X X X X X X X X Extracts X X X X ..... e contract being a composite contract and VAT/Service Tax being mutually exclusively, the further demand of service tax on the amount for which VAT has been paid by the appellant cannot sustain - demand do not sustain - appeal allowed - decided in favor of appellant. - ST/773/2010 - FINAL ORDER No. 40921 / 2018 - Dated:- 22-3-2018 - Ms. Sulekha Beevi C.S. Member (Judicial) and Shri Madhu Mohan Damodhar, Member (Technical) Ms. Radhika Chandrasekar, Advocate For the Appellant Shri S.Govindarajan, AC (AR) For the Respondent ORDER Per Bench The brief facts of the case are that the appellants are registered with the department under the category of Management, Maintenance or Repair Service . On investigations, it wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant on the ground of payment of VAT is legal and proper. The department having accepted that in the course of maintenance, spare parts/ materials are also used / supplied, the denial of deduction of 70% for cost of materials is without any basis. The difference between the purchase price and the selling price of the material is a trading profit for the appellant on which VAT has been discharged on such part including the value addition. Once the sales tax has been discharged, the department cannot again levy service tax on the very same amount as both these taxes are mutually exclusive. She relied upon the Hon ble Supreme Court s judgment in the case of Safety Retreading Co. (P) Ltd. Vs CCE 2017 (48) STR 97 (SC) . It is also argued by h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted that the appellant has discharged sales tax/VAT on the 70% of the value being the cost of materials. It is also admitted that such supply of spares is necessary for provision of services. When VAT has been discharged by the appellant on 70%, the contract being a composite contract and VAT/Service Tax being mutually exclusively, the further demand of service tax on the amount for which VAT has been paid by the appellant cannot sustain. The issue is squarely covered by the decision in the case of Safety Retreading Co. P. Ltd. (supra) . Following the same, we hold that the demand is without any basis. 6. In the result, the impugned order is set aside and the appeal is allowed with consequential relief, if any, as per law. (operativ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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