2007 (11) TMI 73

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....tax on such price. They also provide free after sales service to the customers by charging only the material cost and not labour charges. Shri Amalendu Chakraborty, ld. Consultant appearing for the appellants states that it is an admitted fact that Tata Motors does not reimburse the cost of free after sales service provided by the appellants in respect of cars sold by them. He states that the Ministry issued a Circular No. 62/11/2003, dated 21-8-2003 under which it was clarified that if the value of service provided free of charges is zero, the tax will also be zero even though the service is taxable. He further states that under Circular No. 28/2006-Cus. (sic) (Circular No. 87/05/2006-S.T.), dated 6-11-2006, it was clarified as under : ....

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....rum reported in 2006 (4) S.T.R. 132 (Tri.) = 2007 (78) RLT 532 (CESTAT-Ban.) which has held that the service tax is not leviable when sales tax has been paid. He further points out that the Bangalore Bench has relied on an observation of the Hon'ble Supreme Court in the case of M/s. Gujarat Ambuja Cements Ltd. v. UOI - 2006 (3) S.T.R. 608 (S.C.) = 2005 (67) RLT 469 (S.C.), which reads as under: "This mutual exclusivity which has been reflected in Article 246(1) means that taxing entries must be construed so as to maintain exclusivity. Although generally speaking, a liberal interpretation must be given to taxing entries. This would not bring within its purview a tax on subject matter which a fair reading of the entry does not cover. I....