By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
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(A) [2014] 49 taxmann.com 379 (Allahabad) – Mahendra Engineering Ltd. The question of law before the High Court was whether abatement of cost of material replaced for repair of transformer as stipulated under Notification No. 12/2003. S.T. dated 20-06-2013 is admissible to the respondent or service tax is liable on gross value of bill charges from customers as laid down u/s. 67 of the Finance Act, 1994. The High Court noted that Tribunal has made observations that in the invoices issued by the assessee, the value of goods used, such as transformer oil and service charges are shown separately and in respect of the supply of consumables used in providing the service of repair, sales tax or, as the case may be, VAT is paid. The Tribunal, in this factual situation, observed that when the value of goods used was shown separately in the invoices on which sales tax or VAT has been paid, the service tax would be chargeable only on the service/labour component and the value of goods used for repair would not be includible in the assessable value of service.
Since this factual position was not disputed, the High Court dismissed the appeal having regard to the earlier judgment of the Division Bench in Balaji Tirupati Enterprises [2014] 43 taxmann.com 39 (All) on the ground that no substantial question of law was involved.
(B) [2014] 49 taxmann.com 421 (Allahabad) – S.K. Engineering Works vs. CCE&ST.
On examination of the records, the High Court allowed the writ and remanded the matter to assessing authority on the ground that the work contract of petitioner included service as well as supply of material the Notification dated 20-06- 2003 must be given effect to.
