SURYA TRANSFORMERS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellant have entered into an agreement with U.P. Power Corporation Ltd. for repair and maintenance of their transformers. Scrutiny of the said agreement revealed that the cost of parts required to be used for repair and maintenance activity stands shown separately and repair charges stands shown separately. The dispute in the present appeal is as to whether the cost of spare parts, which the appellant used while repairing transformers is required to be added in the value of the service so provided by them, for the purpose of service tax. It is seen that the lower authorities have held that the costs of said material is to be added by denying the benefit of Notification No. 12/2003 -S.T. to the appellant.

(2.) We have heard both sides duly represented by Shri Vineet Kumar, learned Advocate appearing for the appellant and Shri Amrish Jain, learned SDR appearing for the Revenue.

(3.) AT this prima facie stage, we find that the appellants have paid sales tax as also VAT on the material used in providing the said service by them. The ratio of the various decisions of the Tribunal is to the effect that where the sales tax and VAT stands paid on the material it has to be held that the goods were sold by the assessee. In such a scenario, the value of the same, cannot be added in the value of taxable service. Reference in this regards is made to the following decisions: -