2020 (4) TMI 380

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....assailed in this appeal. 2. The issue involved in this appeal is as to whether the value of spare parts sold while servicing a motor vehicle is required to be included in the value of taxable service under Section 67 of the Finance Act 1994, the Act. The Commissioner has relied upon the Master Circular dated 23 August 2007 to hold that the value of spare parts has to be included in the value of taxable service. 3. Shri A.K. Prasad learned Counsel for the Appellant has submitted that the issue involved in this Appeal has been decided in favour of the Appellant in its own case for the subsequent period in Service Tax Appeal No. 50201 of 2017 and Service Tax Appeal No. 50223 of 2017 decided on 29 June 2017. 4. Learned Authorised Representat....

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....icles, service tax should be levied on the entire bill, including the value of the spare parts, raised by the service provider, namely, service stations. However, the service provider is entitled to take input credit of excise duty paid on such parts or any goods used in providing the service wherein value of such goods has been included in the bill. The service provider is also entitled to take input credit of service tax paid on any taxable services used as input services for servicing of vehicles 7. A bare perusal of the aforesaid Circular dated 23 August 2007 indicates that Service Tax would not be leviable on a transaction treated as sale of goods and subjected to levy of Sales Tax/ VAT and whether a given transaction between the serv....

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.... goods used and the service charges separately. The amounts charged for various parts like HV/LV oils and transformer oil are as per the rates specified in the contracts. It is not disputed that in respect of the supply of the goods used for providing the service of repair, Sales Tax/VAT is paid. This fact is clear from the invoices placed on record. In view of this, the appellants' contracts with their customers have to be treated as split contracts for supply of goods and rendering the service. When the value of the goods used has been shown separately in the invoices and Sales Tax/VAT has been paid on the same, the supply of the goods would have to be treated as sale and the transactions which are sale, cannot be the part of service tran....