TaxTMI 
TaxTMI 
2014 (1) TMI 616
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....e records of the appellant, it was noticed that the appellant were selling spare parts for motor vehicles during the course of undertaking repair services on which they were paying VAT. However, the value of these spare parts were not included in the consideration received for repair services and service tax liability had not been discharged on the value of such spare parts. Accordingly, a notice dated 13/12/201 was issued demanding service tax on the entire value of spare parts sold as shown in their balance sheets amounting to Rs. 98,11,145/- for the period 2006-07 to 2010-11. Notice also proposed demand of interest and imposition of penalties under Section 76, 77 and 78 of the Finance Act, 1994. The notice was adjudicated and the demands....
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....s rendered and accordingly granted stay. Accordingly, he pleads for waiver of pre-deposit of the dues adjudged. He also produced specimen copies of invoices showing sale of spare parts as such wherein VAT/CST liability has been discharged as also specimen copies of invoices where both sale of spare parts as also service were involved and in those cases also, they have discharged sales tax liability on the spare parts sold to the customer. 4. The learned Additional Commissioner (AR) appearing for the Revenue on the other hand submits that as per master circular No.96/7/2007-ST dated 23/08/2007 which has superseded all the previous circulars, it has been clarified that any goods used in the course of providing service has to be treated as in....
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....le of spare parts. As regards levy of service tax on transactions involving both sale of spare parts as also rendering of service in the master circular dated 23/08/2007, it is stated that "service tax is not leviable on a transaction treated as sale of goods and subjected to levy of sales tax/VAT. Whether a given transaction between the service station and the customer is a sale or not, is to be determined taking into account the real nature and material facts of the transaction. Payment of VAT/Sales tax on a transaction indicates that the said transaction is treated as sale of goods." 5.3 From the reading of the above circular, it would appear that even in a case of composite transaction involving sale of goods and rendering of service, ....