The Customs Excise and Service Tax Appellate Tribunal (CESTAT), Ahmedabad held that price of spare parts and lubricants not includable in value of Authorized Service Station services.
The appeal was filed by the appellant, Infinium Motors Guj Pvt Ltd against the order passed by the Principal Commissioner of Central. By the said, the Commissioner confirmed the demand of Service Tax, demand under Rule 6(3) and demand of Cenvat credit on cement and steel, total amounting to Rs. 54,61,35,679/- and consequent penalty and interest.
The appellant is a licensed/ approved dealer of M/s Toyota Kirloskar Motors Pvt. Ltd. who are manufacturer of Toyota brand vehicles and also spare-parts of such vehicles. Accordingly, M/s. Toyota Kirloskar have been selling vehicles as well as spare parts to the appellant under invoices issued on the appellant. The case of the respondent is whether the price of spare parts and lubricants is includible in value of “Authorized Service Station” services rendered by the appellant.
Paresh Dave, Counsel appearing on behalf of the appellant submits that as regard the demand on inclusion of value of spear parts and lubricant in the gross value of service of authorized services station of motor vehicle, and demand of service tax on such spare parts and lubricants. It is a settled legal position that the description, quantity and value of such parts having been shown separately in invoices and VAT having been paid thereon, it amounts to sale of good. Such transaction is not to be considered as a part of the taxable service.
The Bench consisting of Ramesh Nair, Judicial Member and Raju, Technical Member held that “The spare parts and lubricants sold and VAT thereupon was paid the value of such spare parts and lubricants would not attract Service Tax. Hence, the demand of Service Tax on the value of spare parts and lubricants is not sustainable in the present case.”
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