TaxTMI 
TaxTMI 
2023 (7) TMI 1178
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.... firstly, the show cause notice is confusing inasmuch as that it could not conclude that whether the activity handling and forwarding charges is falling under the category of Business Auxiliary Service or Business Support Service, for this reason itself the show cause notice is ab-initio void and not legal hence, the demand is not sustainable. Without prejudice, he further submits that handling and forwarding charges is part of the total sale value of the goods on which VAT was paid by the appellant, therefore any element which is part of the sale on which VAT is paid, service tax cannot be charged on the said activity. He placed reliance on the following judgments:- (a) CST vs. UFO Moviez India Limited - 2022-VIL-07-SC-ST (b) CST vs. UFO Moviez India Limited - 2021-VIL-11-SC-ST (c) UFO Moviez India Limited vs. CST 2017-VIL-774-CESTAT-ST (d) Ketan Motors Limited vs. CCE - 2014 (33) STR 165 (Tri.) (e) Automotive Manufacturers Pvt. Limited vs. CCE 2015 (38) STR 1191 (Tri.) (f) CCE vs. Seva Automotive Pvt. Limited - 2016 (46) STR 428 (Tri.) 3. He further submits that in the case of Automotive Manufacturers Pvt. Limited (supra), ....
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....e parts and components were used in repair and maintenance of motor vehicle even then merely because the part so used in repairs and maintenance were separately billed and VAT was paid thereon, the Tribunal held that on value of such parts, though used for repair and maintenance service of the vehicle will not be liable to service tax as the same was suffered VAT. In this regard the following judgments are reproduced:- (a) In Ketan Motors Limited the Tribunal held as under "5. We have carefully considered the rival submissions. As the issue lies in a narrow compass, after dispensing with the requirement of pre-deposit, we take up the appeal itself for consideration. 5.1 In para 3.2 of the impugned order it is stated that the appellant had furnished the following information and documents vide letter dated 21-9-2011 : (i) Year wise details of value of spare parts used during the course of servicing of motor vehicles for the period 2006-07 to 2010-11; (ii) Copy of Balance Sheet, Profit & Loss Account for the year 2006-07 to 2009-10; and (iii) Copy of ST-3 returns for the period 2006-07 to 2010-11. 5.2 However, while confirming ....
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....d either independently or part of the service and repair of automobiles. In both the situations, invoice are issued for the sale of the goods as well as for collection of service charges for the services rendered. Handling charges were incurred in connection with the procurement of the goods and are included in the value of the goods sold and sales tax/VAT liability is discharged on the value inclusive of the handling charges. Therefore, we do not understand how service tax levy would apply especially when the goods are subject to sales tax/VAT on a value inclusive of handling charges. It is not in dispute that the handling charges are incurred in connection with the procurement of the parts. If that be so, they will obviously form part of the value of the goods when they are subsequently sold. 5.1 Section 67 of the Finance Act, 1994 mandate levy of service tax on a value or consideration received for rendering the services. Therefore, any consideration received for supply of goods is not covered within the scope of Section 67. The decisions of the Tribunal in the case of Ketan Motors Ltd. and Dynamic Motors, cited supra, also support this view. 6. Accordingly, th....
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....he reasoning adopted by the lower appellate authority. Accordingly, we dismiss the appeal filed by the Revenue as devoid of merits." 8. From the above decision, the conclusion drawn is that when there is sale of goods and VAT is paid no service tax can be demanded. In the present case, it is undisputed that the element i.e. amount towards Handling and Forwarding charges, the appellant have shown as part of the sale value of the goods and VAT was paid. Therefore, following the above principle of law laid-down by Hon'ble Supreme Court and by Tribunals, in the present case the demand is not sustainable. Hence the impugned order is set-aside and the appeal is allowed. ( Pronounced in the open court on 24. 07. 2023 ) ============= Document 1 GED HONDA c. Code : 21000018 dbl Dream Honda Jivan Jyot Motors Pvt. Ltd. Jivan Jyot Theater Compound, Udhna Main Road, Surat. Ph.: +91-261-4060406 E-mail: [email protected] Web Site: www.dreamhonda.in GST NO.:24221803594 Dt :06/01/2007 RETAIL INVOICE TIN CST NO.:24721803594 Dt :06/01/2007 Invoice No. me : ANVARBHAI HAROONRASHID SHAIKH sl. Address: 2/2622, A-1, ASHYANA, Code ....