TaxTMI 
TaxTMI 
2012 (9) TMI 704
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....espective of the fact whether spare parts were actually supplied or not, because according to them maintenance and repair charges were fixed on average basis taking into consideration the life of the dumper and life of spare parts. 2. Revenue was of the view that the appellants should have paid service tax for the consideration received under the contract for maintenance and repair after claiming exemption for value of materials sold, if any, as per the provisions of Notification No. 12/2003-ST dated 1.3.2003. Revenue found that the consideration charged for maintenance and repair service was in excess of the price of the materials sold. Therefore Revenue was of the view that there was a short levy of service tax during the financial year 2009-10. Revenue issued a Show Cause Notice and after due process of law a demand for Rs.77,19,688/- has been confirmed along with interest and penalty. Aggrieved by the order of the Commissioner, the appellants have filed this appeal before the Tribunal along with an application for waiver of pre-deposit of dues arising from the impugned order for admission of the appeal. 3. During the impugned period the appellants were receiving consideration....
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....ed at regular list price) Differential Value (in Rs.) (1) (2) (3) 4=(2)-(3) 1 (2007-08) 2,50,08,542 1,05,35,604 1,44,72,938 2 (2008-09) 6,12,79,910 3,99,36,915 2,13,42,995 3 (2009-10) 8,93,36,925 4,86,93,432 4,06,43,493 4 (2010-11) 5,41,28,411 8,87,83,334 -3,46,54,923 5 (2011-12) 4,64,59,433 6,60,12,253 -1,95,52.820 Total 27,62,13,221 * 25,39,61,538 2,22,51,683 *Sales Tax has been paid on this value 5. He also relies on the following decisions of the Tribunal in support of his argument that once VAT is paid there cannot be any service tax liability on the corresponding value:- (1) Wipro GE Medical Systems Pvt. Ltd. Vs. CST, Bangalore - 2009 (14) STR 43 (Tri.-Bang.) (2) Xerox Modicorp Ltd. Vs. State of Karnataka - 2005 (142) STC 209 (SC). 6. The rely on the following decisions and argue that a contract should be understood as per the intentions of the parties: (1) M/s Xelo Pvt Ltd. Vs. DDIT (2) Union of India Vs. Mahindra & Mahindra Ltd. - 1995 (76) ELT 481 (SC) 7. He also relies on the Circular of CBEC issued vide 96/7/2007- ST dated 23.8.2007 at reference code 036.03/23-8-07 which reads as under: Reference Code Issue Clarificati....
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..... UOI- 2006 (2) S.T.R. 161 (S.C.) this contract cannot be considered as anything other than a service contract. He accepts that if there is any sale of goods made for providing service, the value of goods sold is exempt from payment of service tax by Notification 12/2003-ST. He points out that the demand is made only after extending the benefit of such exemption adopting the list price of the goods as per para 6 of the impugned order. In fact the actual value for such parts will be much lower considering that the spare parts are procured in bulk from the manufacturers by the appellants. He also points out that on items like tool kit cannot be considered to be sold because these are items used by the appellant and property in such goods may not be transferred to the service recipient. 10. The Ld. AR points out that the decision in Wipro Medical Systems is with reference to the facts of the case where the value of goods sold was not available. The Tribunal has just accepted the value on which VAT is paid as the value of goods sold. It does not lay down a law that such a presumption cannot be rebutted through proper calculations which has been done in this case. He also invites our a....
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....tter will have to be decided by law that is applicable. We also note extracts from para 5 of the order of the Apex Court in the case of Mahindra and Mahindra Ltd. Supra reading as under: "Ordinarily the Court should proceed on the basis that the apparent tenor of the agreements reflect the real state of affairs. It is, no doubt, open to the revenue to allege and prove that the apparent is not the real and that the price for the sale of the CKD packs is not the true price, and the price was determined by reckoning or taking into consideration the lumpsum payment made under the collaboration agreement in the sum of 15 million French Francs. The short question is whether the revenue has succeeded in showing that the apparent is not the real and that the price shown in the invoices does not reflect the true sale price and so section 14(1)(b) of the Act was properly invoked." Prima facie this is a case where Revenue has succeeded in proving that the prices charged for supply of materials were not the correct prices 15. The argument that in later years of the contract the appellants were paying more tax than what was due is also to be taken with a pinch of salt at this prima facie sta....