[2016-TIOL-166-CESTAT-ALL] M/s Tanya Automobiles Pvt. Ltd vs. Commissioner of Central Excise and Service Tax, Meerut-I

Facts
Appellant is an Authorised Service Station of Motor Vehicles and was paying service tax on the labour charges only and not on value of spare parts and lubricants used in the course of servicing of the motor vehicles. Department demanded service tax on the entire amount of invoice including the value of spare parts on the contention that without the use of spare parts and consumables in the course of servicing of vehicles, the service is not complete and therefore is an integral part of service. It was further observed that benefit of Notification No. 12/2003-ST is also not available as they are not issuing separate invoices for sale of spares.

Held
The Tribunal noted the decision of Samtech Industries vs. Commissioner of Central Excise [2014-TIOL-643- CESTAT-DEL] upheld by the Hon’ble High Court of Allahabad [2015(38) STR 162] and the CBEC letter dated 27.09.2013 addressed to the CCE, Meerut specifically providing that service tax on cost of goods supplied during repair does not appear sustainable. The Tribunal held that the cost of items supplied/sold with a documentary proof specifically indicating value of goods, demand of service tax on the cost of goods supplied during repair is not sustainable.