Exclusion of goods value from taxable service value upheld where invoices and records supported a genuine goods-services split.

Separate invoicing for goods and services, payment of VAT on the goods component, and corresponding entries in the work order and balance sheet supported exclusion of the value of goods and materials sold from the taxable value under Notification No. 12/2003-ST. The notification applies where documentary proof identifies the value of goods sold, and the Revenue's allegation that the 80:20 split between goods and services was artificial failed for lack of documentary evidence or investigation material. The earlier factual finding that the bifurcation was reasonable was therefore sustained, and the assessee remained entitled to the notification benefit.

---

---

Issues: Whether the assessee was entitled to exclusion of the value of goods and materials sold from the taxable value under Notification No. 12/2003-ST dated 20.06.2003, and whether the Revenue had established that the 80:20 bifurcation between goods and services was artificial.

Analysis: The assessee issued separate invoices showing the value of goods sold and the value of services rendered, paid VAT on the goods component, and the work order as well as the balance sheet reflected the same arrangement. The notification permits exclusion of the value of goods and materials sold where documentary proof specifies that value. The allegation that the bifurcation was artificial was not supported by any documentary evidence or investigation material. The authorities below had already examined the invoices, work order, and supporting accounts, and found the split to be reasonable.

Conclusion: The assessee was entitled to the benefit of the notification, and the Revenue failed to dislodge the factual finding supporting the bifurcation.

---