Notification 12/2003-ST exclusion for separately invoiced materials in repair services upheld; material value not taxable.

Notification No. 12/2003-ST was applied to repair and maintenance services where invoices separately identified the value of materials and the service component. The Tribunal relied on its earlier decision in the same assessee's case, noted that service tax had already been paid on the service portion, and found no departmental evidence that the material value was not separately charged or that disqualifying Cenvat credit had been taken. On that basis, the value of materials could not be added to the taxable service value, and the demand was held unsustainable in favour of the assessee.

---

---

Issues: Whether the appellant was entitled to the benefit of Notification No. 12/2003-ST so as to exclude the value of materials used in repair and maintenance services from the taxable value.

Analysis: The Tribunal followed its earlier decision in the appellant's own case for an earlier period and noted that the invoices showed the value of materials separately from the service component. It was also significant that service tax had already been paid on the service portion and that the Department had not shown that the value of materials was not or that Cenvat credit had been availed in a manner disqualifying the claim. On that basis, the Tribunal held that the Department was not justified in adding the value of materials to the service value for levy of service tax.

Conclusion: The appellant was entitled to the benefit of Notification No. 12/2003-ST and the demand by including the value of materials was unsustainable; the issue was decided in favour of the assessee.

---