TaxTMI 
TaxTMI 
2013 (8) TMI 745
X X X X Extracts X X X X
X X X X Extracts X X X X
....manufacturer to the buyers of the two-wheelers. For such free services provided by applicant, YMIPL pays charges to the applicant both for service component and also for the cost of the spare parts replaced. The applicant has been paying service tax on the service component of the payment received from YMIPL. However, the applicant was not paying service tax on cost of spare parts reimbursed to the applicant. Revenue was of the view that the applicant should have paid service tax on the value of service inclusive of the material used for providing such services because that is the gross consideration received by the applicant for providing such service. Based on such reasoning, a demand was issued for service tax short paid during the perio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n the case of Intercontinental Consultants & Technocrats Pvt. Ltd. Vs UOI - 2013 (29) STR 9 (Del.) has struck down Rule 5 of Service Tax (Determination of Value) Rules, 2006 which provided for including expenses reimbursed by the service recipient in the value of consideration received by the service provider and levying tax on it. He submits this is clearly a case where the service is provided to YMIPL and where YMIPL reimburses certain expenses incurred by the applicant on behalf of YMIPL. He argues that there is very strong merit in the case of the applicant and Tribunal has already granted stay in a few similar case and therefore this appeal may also be admitted without any pre-deposit. 4. Opposing the prayer, the Ld. A. R. for Revenue....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3) S.T.R. 608 (Tri. - LB). 6. We have considered arguments on both sides. Prima facie, we are not in agreement with the argument of the Ld. A. R. for Revenue that spare parts of motor vehicles used in repair is of the same nature as chemicals used in photography because the former are in the nature of spare parts where a sale prior to replacement is acceptable as a concept and the latter has the nature of consumables. 7. Secondly, Rule 6 (1) (vi) of Service tax (Determination of Value) Rules 2006 does not specifically state that the rule is about cost of spare parts. Having regard to the decision of the apex Court in the case of BSNL Vs. UOI 2006 (2) STR 161 (SC), we are of the view that there cannot be levy of service tax on value of spa....