TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 867
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....29A)(b) of the Constitution and whether value of photography service shall be determined in isolation of cost of such goods? (2) Whether the term 'sale' appearing in exemption Notification No.12/03-ST dated 20.06.2003, is to be given the same meaning as given by Section 2(h) of the Central Excise Act, 1944, read with Section 65(121) of the Finance Act, 1994 or this term would also include the deemed "sale" as defined by Article 366(29A)(b) of the Constitution? It was directed to be heard with CEA No.01/2013. 3. The facts of the present case, in brief, are that the appellant-assessee is registered with the Central Excise Department under Service Tax registration No. R/146/ST/WDN/2003-04 and engaged in the business of retreading of old and used tyres and reconditioning of conveyor belts under the rate contract mainly for M/s Northern Coalfields Ltd. Singrauli and for other customers. The said retreading and reconditioning is a specialized remanufacturing process in which raw material like tread rubber and vulcanized solution etc. are used and after such reconditioning the old tyres and conveyor belts become usable as goods as new one. On the basis of an intelligence that the asse....
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.... the Court that the present appeal relates to the issue of retreading of tyres and not photography and, therefore, the substantial question of law as claimed at serial No.(iv) of the appeal would require an answer. 5. We find force in the preliminary submission of learned counsel for the parties. Keeping in view the facts and circumstances of the case, it appears that there is some typographical mistake in the substantial question of law No.(1) framed vide order dated 09.12.2014 and hence, it is reframed and substituted as under:- "(1) Whether while providing retreading of old tyres the use of the raw material in the form of trade rubber, vulcanizing solution etc. being incidental to the provision of service, amount to sale of goods in terms of Article 366(29A)(b) of the Constitution and whether value of taxable service shall be determined in isolation of cost of such goods?" 6. Learned counsel for the appellant relying upon the judgment in Safety Retreading Company Private Limited vs. Commissioner of Central Excise, Salem, (2017) 3 SCC 640 submitted that identical question has been decided by the Apex Court in favour of the assessee and it has been categorically held that in a....
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....(i.e. on 13.03.2020) and identical substantial questions of law have been answered in favour of the assessee and the order passed by the Larger Bench in Aggarwal Colour Advance Photo System (supra) has been set aside by a detailed order. 11. Apart from the aforesaid, the similar issue: as to whether in a contract for retreading of tyres, service tax is leviable on the total amount charged for retreading including the value of the materials/goods that have been used and sold in the execution of the contract or exemption to material component therein can be granted, has been considered by the Apex Court in Safety Retreading Company (supra). The Apex Court set aside the majority view of the Special Bench of the Tribunal and held that component of gross turnover in respect of which assessee had paid taxes under local Act with which it is registered as works contractor is excluded from service tax. It has been further held that in a contract of retreading of tyres, it cannot be said that there is no sale or deemed sale of parts or other materials used in the execution of contract of repairs and maintenance. The relevant extract of the said judgment reads as under:- "11. The exigibili....
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....use notice dated 24th January, 2008 would go to show that the entire thrust of the Department's case is the alleged liability of the appellant - assessee to pay service tax on the gross value. In the aforesaid show cause notice, the details of the value of the goods, raw materials, parts, etc. and the value of the services rendered have been mentioned and service tax has been sought to be levied at the prescribed rate of ten per cent (10%) on the differential amount. It is now stated before us that the aforesaid figures have been furnished by the assessee himself and, therefore, must be understood not to be authentic. This, indeed, is strange. No dispute has been raised with regard to the correctness of the said figures furnished by the assessee in the show cause notice issued to justify the stand now taken before this Court; at no point of time such a plea had been advanced. 14. Besides the above, the affidavit of the learned Commissioner, referred to above, proceeds on the basis that the appellant assessee is also liable to pay service tax on the remaining seventy per cent (70%) towards material costs in addition to the 30% of the retreading charges. This is clear from th....