Service tax exemption under Notification 12/2003-ST required proof of sales tax on material components, with remand for reconsideration.

Eligibility for exemption under Notification No. 12/2003-ST depended on whether sales tax had been paid on the material component, and the Tribunal treated the issue in light of an earlier similar precedent. The denial of the notification benefit was not sustained as final, because the Commissioner had to reconsider the claim after giving the appellant an opportunity to produce evidence of sales tax payment on the material components. The matter was therefore remanded for fresh decision in accordance with the cited precedent.

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Issues: Whether the appellant was entitled to the benefit of Notification No. 12/2003-ST dated 20.06.2003 in respect of the material component on which sales tax was paid.

Analysis: The appeal turned on whether the benefit of the notification, as already recognised in a similar earlier decision, should be extended to the appellant. The impugned order denying the notification benefit was examined in light of the cited precedent, and the matter required reconsideration by the Commissioner after allowing the appellant an opportunity to produce evidence regarding payment of sales tax on the material components.

Conclusion: The denial of the notification benefit was not sustained as final; the matter was sent back to the Commissioner for fresh decision in accordance with the cited precedent.

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