Sale of Spares Under Lifetime Supply Contracts Exempt from Service Tax; Trading Classified as Goods, Not Services.

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....Levy of service tax - Sale of Bought-Out Spares - contracts with a lifetime spares supply mandate - rendering service under the category of "Business Auxiliary Service" or not - The Tribunal found that the transactions were made on a principal-to-principal basis. There was no evidence of an agency relationship or commission-based transactions. - The Tribunal held that mere trading of goods, including spares, is outside the purview of "service" u/s 66D(e) and covered under the Negative List. Therefore, no service tax can be demanded on such transactions, especially when VAT is already paid.....