2017 (3) TMI 1291

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....Rs. 1,28,16,911/- under the head of "Business Auxiliary Service" defined under Section 65(19) of the Finance Act, 1994 alongwith interest and penalties. The appellant is engaged in providing bullet proofing services to various vehicles. For this purpose two different practices are adopted by them. In the first, the appellant purchased the vehicles and carried out bullet proofing of the vehicle and then sold them. In such cases, VAT is paid. No service element is involved. This is merely a trading activity wherein the vehicle was purchased and after making improvement, was sold to the customer. Hence, such activity is outside the purview of service tax. In the second type, the customer supplies the vehicle to the appellant which is subjected....

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....omes to composite indivisible works contracts, such contracts can be taxed by Parliament as well as State legislatures. Parliament can only tax the service element contained in these contracts, and the States can only tax the transfer of property in goods element contained in these contracts. Thus, it becomes very important to segregate the two elements found to be constitutionally infirm. This position is well reflected in Bharat Sanchar Nigam Limited vs. Union of India (2003) 3 SCC 1 = 2006 (2) STR 161 (SC) as follows:- "No one denies the legislative competence of the States to levy sales tax on sales provided that the necessary concomitants of a sale are present in the transaction and the sale is distinctly discernible in the tr....