Safety Retreading Co. Pvt.Ltd vs Comm.Of Customs & Cent.Excise,Salem

The Supreme Court ruled that in a contract for retreading of tyres, service tax is not leviable on the total amount charged, as per Section 67 of the Finance Act, 1994, which excludes the cost of materials sold during the service. The Court emphasized that the definition of 'taxable service' under Section 65(105)(zzg) and the exemption provided in Notification No.12/2003-ST must be adhered to, ensuring that only the service component is taxed. The appeal was allowed, overturning the demand for tax on the gross value including materials.