Service tax on maintenance and repair: separate invoicing and VAT-paid materials meant no short payment was established.

In maintenance and repair activity, service tax was not payable on the value of goods or materials sold where the invoices separately showed material and service charges, VAT had been paid on the material portion, and supporting evidence showed that the actual service component was lower than the percentage adopted by the taxpayer. Because the amount subjected to service tax exceeded the taxable service value, the alleged short payment was not established. The exclusion of the value of goods sold was accepted, and the demand could not be sustained.

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Issues: Whether service tax was payable on the value of goods/material used in the maintenance and repair activity, despite separate invoicing for sale of material and service charges and evidence showing that the taxable service portion was lower than the amount on which service tax had been paid.

Analysis: The invoices reflected separate values for material sold and service rendered, VAT had been discharged on the material portion, and the chartered accountant's certificate showed that the actual labour or service component was below the 33% adopted by the appellant. On that basis, the amount subjected to service tax was found to be higher than the actual taxable service value. The claimed short payment was therefore not established, and the exclusion of the value of goods sold was accepted.

Conclusion: No short payment of service tax was made out, and the demand could not be sustained.

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