Appellants' Claim for Service Tax Abatement on Elevator Parts Denied, Evidence of Sales Tax Payment Considered

The appellants sought benefit under Notification No. 12/2003-ST for abatement of cost of components/parts under Annual Maintenance Contract (AMC) for elevators. The Commissioner denied the benefit due to no separate invoicing of components/parts. The appellants argued Sales Tax was paid on replaced components/parts, supported by evidence. The Tribunal referenced a similar case for material value deduction. The revisional authority demanded Rs. 1,48,213 as differential Service Tax on components/parts supplied under AMCs. Despite the lack of specified costs in the AMC, the supplied components/parts had paid Sales Tax. Waiver of pre-deposit and stay of recovery was granted for the disputed Service Tax amount.

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Issues involved: Interpretation of Notification No. 12/2003-ST for abatement of cost of components/parts under Annual Maintenance Contract (AMC) for elevators.

Summary:
1. The appellants sought benefit under Notification No. 12/2003-ST for abatement of cost of components/parts under AMC from July to December, 2003. The learned Commissioner denied the benefit as there was no sale of components/parts invoiced separately to customers. The appellants argued that Sales Tax was paid on replaced components/parts, supported by relevant documents. The Tribunal's decision in Adlabs v. Commissioner of Central Excise was also cited for deduction of material value in a similar context.

2. The differential Service Tax demanded by the revisional authority was Rs. 1,48,213 on components/parts supplied under AMCs. The AMC did not specify the cost of replacements, indicating free replacements for unspecified components/parts. However, the components/parts supplied were Sales-tax paid as per invoices and assessment orders, raising the principle that Service Tax should not be levied on goods with paid Sales Tax.

3. The issue was deemed arguable, leading to the grant of waiver of pre-deposit and stay of recovery for the small amount of Service Tax demanded by the Commissioner.

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