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Judgment
Appeal has been filed against Order-in-Appeal No.118(GRM)ST/JPR-1/2006 dated 26.12.2006 which upheld the Order-in-Original dated 19.7.2006
in terms of which • service tax demand of Rs.19,243/- (for the period 2002-2003 to 2004-2005 (up to September, 2004) along with interest and
penalty was upheld.
The appellants are an authorised service station and provided annual maintenance of vehicles under the annual maintenance scheme under which
they charged fixed amount towards annual maintenance charges. Under that scheme they collected Rs.5,48,439/- but paid service tax only on 50%
thereof on the ground that the remaining 50% pertained to oil changes. However, they did not provide any evidence of value of oil and therefore the
primary adjudicating authority disallowed the said deduction and as the appellants had suppressed the fact that they were paying service tax only on
half of the amount received by them penalties under Sections 76 & 78 were also imposed because during the relevant period, the said two penalties
were not mutually exclusive. In the grounds of appeal, the appellants have essentially stated that the lower authorities have seriously erred and that the
penalty under Section 76 & 78 of the Finance Act, 194 was imposed without any hearing. They however admitted that they do not have any evidence
regarding cost of oil changed during servicing of vehicles.
We have considered the appellants submissions. We find that the primary adjudication order as well as the order in appeal have been passed after
duly hearing the appellants and therefore their contention that they were not heard is factually incorrect. It is not disputed that they have paid service
tax only on 50% of the annual maintenance charges recovered by them on the ground that the remaining 50% pertained to value of oil changed during
servicing of vehicles. However, they have admitted that they never raised any bills for the oil so changed nor did they have any evidence of the value
of such oil and that the entire amount for annual maintenance used to be recovered in lump sum. In this regard, we find that Notification No. 12/2003-
ST is worded as under:
In exercise of the power conferred by Section 93 of the Finance Act, 1994 (32 to 1994), the Central Government, being satisfied that it is
necessary in the public interest so to do, hereby exempts so much of the value of all the taxable services, as is equal to the value of goods
and materials sold by the service provider to the recipient of service, from the service tax leviable thereon under Section (66) of the said
Act, subject to condition that there is documentary proof specifically indicating the value of the said goods and materials.
It is evident from the wording of the said notification that for claiming exemption there-under, the appellants have to provide documentary evidence
specifically indicating the value of oil which admittedly they have not been able to do.
Therefore we do not find any infirmity in the impugned order.
The appeal is dismissed.