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HIGH COURT OF JUDICATURE AT ALLAHABAD Chief Justice's Court AFR Case :- CENTRAL EXCISE APPEAL No. - 159 of 2014
Appellant :- Commissioner Customs And Central Excise
Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice
The appeal arises from a decision of the Customs, Excise & Service Tax Appellate Tribunal dated 21 February 2014.
The Revenue which is in appeal has sought to raise the following question of law:
However, in the present case, the Commissioner was of the view that the assessee had entered into a contract for a complete repair package and the break-up of individual items was for the purpose of computing the price variation. The observations in that regard in paragraph 25 of the order of the Commissioner read as follows: "In this regard, I am in agreement with the party's view that while providing any kind of service of repair and maintenance, if any goods are replaced which are separately identifiable and on which proper taxes have been paid, the value of such goods should be excluded from the total value charged for the purpose of levy of Service Tax and the Service Tax should only be charged on the value representing the labour charges etc. as provided under Notification No.12/2003 dated 20.6.2003; but in the instant case, the condition are altogether different as in this contract a complete repair package cost per transformer (capacity wise) is being charged by the party. Further, it has been explained under para 1.2 of the said contract that for the purpose of calculations of price variation of HV/LV Leg Coil, Transformer Oil, excise duty, Sales Tax, the breakup of repair package is being given that means the replacement of parts like HV/LV Leg Coil, Transformer Oil was as part and parcel of condition of the said contract and the party was not having any option not to replace these items etc. which do not find a mention in the said contract."
The Commissioner confirmed the demand of duty on service tax and imposed a penalty.
In this background, the Tribunal held that merely because the segregation of various items was shown in the contract for the purpose of price variation, the contract would not be regarded as one for providing services inclusive of the value of the goods which were used. The Tribunal relied upon Notification 12/2003-ST, dated 20 June 2003 under which the value of goods and materials sold by the service provider to the recipient of services stands exempted from the service tax leviable thereon subject to the condition that there should be documentary proof specifically indicating the value of the goods and materials. In the present case, it has been found as a matter of fact that the value of the goods and materials utilized for repair of the transformers is separately disclosed in the agreement and is separately mentioned in the invoices of the assessee. The assessee has paid excise duty or, as the case may be, value added tax on goods used in the repairing process. It was in this factual background, on which there is no dispute, that the Tribunal held that service tax could not be demanded on that component representing the value of the goods and materials used for carrying out repairs. The mere fact that the cost of the various items was shown for the purpose of price variation was held not to make any difference to the legal position.
On this finding of fact which was recorded by the Tribunal, no substantial question of law would arise. As a matter of fact, we may note that in the memo of appeal which has been filed by the Revenue, no effort has been made to displace the finding of fact which has been recorded by the Tribunal as being admitted.
Before concluding, we may note that the Tribunal has relied upon its own decision in the case of Balaji Tirupati Enterprises vs. CCE, Meerut1. The Tribunal has noted that this decision was upheld by the High Court in 2013 (32) S.T.R. 530 (All.). This has not been disputed either in the memo of appeal or in the course of submissions before this Court.
We may note at this stage that the learned counsel appearing on behalf of the assessee has made a grievance that before appeals are filed before this Court by the Revenue, in view of the directions of the Court, service is required to be effected on the assessee prior to filing. However, it has been stated on behalf of the assessee that the Revenue serves only a narrative prepared by the Commissioner and not the memo of appeal, as a result of which it becomes difficult for the assessee to track the appeals which are being filed. This is disputed by the learned counsel for the Revenue. We only need to clarify that the Revenue, when it causes service to be effected on the assessee, must ensure that a complete set of the paper book is served on the assessee and not just the narrative so as to enable the assessee to pursue and keep track of the appeal when it is filed. RK (Dilip Gupta,J.) (Dr.D.Y.Chandrachud,C.J.)
Assessee has paid excise duty or, as the case may be, value added tax on goods used in the repairing process. ..... service tax could not be demanded on that component representing the value of the goods and materials used for carrying out repairs. The mere fact that the cost of the various items was shown for the purpose of price variation was held not to make any difference to the legal position |