Repairs& Maintenance of Transformers – no service tax paid on material on which Excise/Sales Tax is paid and separately indicated on invoice – Notification No. 12/2003, dated 20-06-2003.

Commissioner of Customs & Central Excise vs. J.P. Transformers [2014] 50 taxmann.com 31 (Allahabad)

FACTS:

Assesses was engaged in the manufacture as well as repairs and maintenance of electrical transforms. By virtue of notification NO. 12\2003 dated 20-06-2003; services tax was paid only on lab our charges recovered from the customer. It was contended that the contract being a composite contract of services of repairing transformers, it was required to pay services tax on the total contracted value, including consumables and items used in the repair of the transformers. Tribunal decided the matter in favors of the assesses. Aggrieved by the same, revenue filed appeal before the high court.

Held:

The high court observed that tribunal has given its decision based on undisputed finding of fact that the value of the goods and materials utilized for repair of the transformers is separately disclosed in the agreements and in the invoices and excise duty\value added tax has been paid on goods used in the repairing process. Therefore, since there is no substantial question of the law the appeal is dismissed. It was also noted that, reliance placed by the tribunal on its own decision in the case of balajiTirupati enterprises _vs. CCE [2014] 43 taxmann.com 42 (new Delhi-CESTAT), which is subsequently upheld by the high court has also not been disputed in the appeal memo.