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of <h1>Tribunal rules in favor of assessee in service tax dispute, citing Supreme Court precedent</h1> <h3>M/s. Safe Tyres Versus Commissioner of Central Excise, Madurai and Commissioner of Central Excise, Coimbatore Versus M/s. Sri Balaji Retreading (P) Ltd. and M/s. Select Retreading (P) Ltd. </h3> The Tribunal allowed the appeal filed by the assessee and dismissed the appeals filed by the department in the case concerning the demand of service tax ... Benefit of N/N. 12/2003-ST dated 20.6.2003 - Valuation - includibility - cost of materials - whether in providing tyre retreading service, cost of materials are liable to deducted in terms of N/N. 12/2003-ST? - Held that: - the issue is settled by the decision in the case of an assessee is liable to pay tax only on the service component which under the State Act has been quantified at 30% - appeal allowed - decided in favor of assessee. Issues:Appeal against demand of service tax based on Notification No. 12/2003-ST dated 20.6.2003 for retreading old tyres.Analysis:The appeals involved in this case revolve around the dispute regarding the demand of service tax raised by denying the benefit of Notification No. 12/2003-ST dated 20.6.2003. The assessees, engaged in retreading old tyres using bought-out tread rubber and other materials, faced a challenge from the department regarding the levy of service tax on the entire cost involved in the retreading process. The department contended that the entire cost should be subject to service tax, leading to the issuance of show cause notices. However, the assessees had paid the service tax and approached the Tribunal seeking relief from the demand.In the specific appeals numbered ST/445/2009 and ST/487/2009, the department had appealed against the order of the lower appellate authority, which had ruled in favor of the assessees by granting them the benefit of Notification No. 12/2003. The crucial question at hand was whether the cost of materials in providing tyre retreading service should be deducted as per the terms of Notification No. 12/2003-ST.The Tribunal referred to a significant decision of the Hon’ble Supreme Court in the case of Safety Retreading Company - 2017-TIOL-28-SC-ST, which had settled the issue regarding the liability of deducting the cost of materials in providing tyre retreading service under Notification No. 12/2003-ST. In line with the Supreme Court's decision, the Tribunal concluded that the demand for service tax was not sustainable. Consequently, the appeal filed by the assessee was allowed, and the appeals filed by the department were dismissed. Additionally, the cross-objections filed by the assessees were also disposed of accordingly.The Tribunal's ruling, based on the interpretation of relevant legal provisions and the precedent set by the Supreme Court, provided clarity on the applicability of Notification No. 12/2003-ST in the context of service tax demands related to tyre retreading services. The decision highlighted the importance of legal precedents in resolving disputes and ensuring consistency in tax matters.
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