Documentary proof of sale of goods can support service tax exemption when concurrent factual findings satisfy the notification's conditions.

Exemption under Notification No. 12/2003-ST was available where contract documents, invoices and accounts provided documentary proof that goods and materials were sold to the service recipient. The authorities found, on concurrent factual appreciation of the contract, invoices and profit and loss account, that the prescribed condition was satisfied. In the absence of any substantial error in that factual assessment, the exemption was correctly allowed and the Revenue challenge failed. The stated principle is that documentary evidence establishing sale of goods and materials will support exemption, and such concurrent findings will not ordinarily be disturbed in appeal without a material error.

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Issues: Whether exemption under Notification No. 12/2003-ST dated 20.06.2003 was admissible on the basis of the contract documents, invoices and accounts showing sale of goods and materials to the service recipient.

Analysis: The condition in the notification required documentary proof of the value of goods and materials sold by the service provider. The authorities below examined the contract, invoices and profit and loss account and recorded concurrent findings that the condition stood satisfied. The challenge in appeal was confined to the sufficiency of documentary evidence, but no serious error in the factual appreciation by the lower authorities was shown. The finding that the assessee had established eligibility for exemption was also consistent with the Tribunal's view in similar matters.

Conclusion: The exemption was correctly allowed and the Revenue's challenge failed.

Ratio Decidendi: Where the prescribed documentary proof establishes that goods and materials were sold to the service recipient, concurrent factual findings allowing exemption under the notification will not be interfered with in appeal absent a substantial error.

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