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Management, Maintenance and Repair Services [Sec 65(105)(zzg)]
Effective upto 30th June, 2012
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Landmark Service Tax Judgment - Management, Maintenance and Repair Services

INTRODUCED: With Effect From 1st July 2003
 
Contents
Scope
Exemption
Clarification
Relevant Notifications / Circulars
Landmark Judgements
News
Accounting Code
Service Tax 00440245
Interest  00440246
Penalty 00441388
 
DEFINITION:

According to Section 65 (105) (zzg), any service provided or to be provided to any person, by any person, in relation to management, maintenance or repair, is a ‘taxable service’

According to Section 65 (64), “management, maintenance or repair” means any service provided by –

(i)   any person under a contract or an agreement; or

(ii) a manufacturer or any person authorised by him, in relation to,

(a) management of properties, whether immovable or not

(b) maintenance or repair of properties whether immovable or not; or

(c) maintenance or repair including reconditioning or restoration, or servicing of any goods or equipment, excluding motor vehicle.

Explanation - For the removal of doubts, it is hereby declared that for the purposes of this clause,-

(a) “goods” includes computer software;

(b) “properties” includes information technology software;

According to Section 65 (50), ‘Goods’ has the meaning assigned to it in Section 2 (7) of The Sale of Goods Act. Accordingly "goods" means every kind of movable property other than actionable claims and money; and includes stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale;

According to Section 65 (53a) "information technology software” means any  representation of instructions, data, sound or image, including source code and object code, recorded in a machine readable form, and capable of being manipulated or providing interactivity to a user, by means of a computer or an automatic data processing machine or any other device or equipment;

 
SCOPE:
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Service Tax is leviable on the services provided towards management, maintenance and repair irrespective of the fact that the receiver of the service is different from the person making payments for such services. Maintenance is to keep a machine, building etc. in a good condition by periodically checking and servicing or repairing. While repair is a one time activity, maintenance is a continuous process of which repairing may be incidental or ancillary.

Maintenance or repair of computer software will be leviable to service tax under this category. It may be noted that development of computer software is distinct from maintenance or repair of computer software and development of computer software continues to be leviable to service tax as an "information technology service".

 
SERVICE TAX EXEMPTIONS:
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(a) Small service providers whose aggregate value of taxable services rendered in the previous year has not exceeded the limit of Rs. 10,00,000/-  (Service Tax Notification No. 08/2008-S.T., dated 01.03.2008)

(b) Services provided to the United Nations or International Organisations

(c) Services provided to Special Economic Zones (SEZ) units (including unit under construction) and SEZ developers

(d) Services which are exported as per ‘Export of Services’ Rules

(e) Services provided for official or personal use of foreign diplomatic missions and family members of diplomatic missions.

(f) Services provided by Reserve Bank of India

(g) Out of total value of service provided proportionate value of goods and material provided by the Service Provider

 
CLARIFICATION:
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ISSUE 1: Whether maintenance or repair of software is liable to service tax?

ANSWER 1: Explanation to section 65(64) provides that “goods” includes computer software. Since, maintenance or repair of any goods is liable to service tax, services provided in relation to maintenance or repair or servicing of computer software is liable to service tax under “management, maintenance or repair” service [section 65(105)(zzg)].

 
RELEVANT SERVICE TAX CIRCULARS/INSTRUCTIONS/TRADE NOTICES:
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Service Tax CBEC Instruction Letter (File No. 334/1/2007-TRU) dated 28-02-2007.
Service Tax CBEC Instruction Letter (File No. B1/6/2005-S.T.) dated 27-07-2005.
Service Tax Circular No. 59/8/2003-S.T., dated 20-06-2003 Clarification of Scope
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Case Laws Related

  • STO 2014 CESTAT 15
  • Service Tax: Service Tax on maintenance and repair service of immovable property was leviable only w.e.f 15/6/2009 and period from 1/7/2003 to 9/9/2004. As the service tax was paid due to mistake of law, whether time limit is applicable or otherwise: Scope: When duty was paid by under protest or when an assessee is contesting the leviability of a tax by filing appeals the entire payment of tax, during the period of contest, is treated as deemed protest and time bar is not applicable in such cases. Further, it is also a case of payment of service tax under mistake of law and as per the case laws viz. I) Hindustan Cocoa Products Vs. UOl - CEO 1995 CESTAT 2 LB . II) Indo Nippon Chemicals Co Ltd Vs. VOl - STO 2002 Guj 70 , III) Industrial Plastic Corpn Pvt Ltd., Vs. UOl - CEO 1991 Bom 17, IV) CCE Mumbai II Vs. Allied Photographics India Ltd. - STO 2004 SC 323, refund claim will not be time barred. In view of the above law laid down by Supreme Court in the case of CCE, Mumbai Vs. Allied Photographics India Ltd., STO 2004 SC 323doctrine of unjust enrichment has to be looked into even in cases of duty paid under protest. Certificate from a cost accountant to the effect that appellant has not recovered the duty refund sought for in any way, this aspect of unjust enrichment has not been examined by the original adjudicating authority and the first appellate authority(Para 5,7).

    Appeal allowed by way of remand.

  • STO 2013 CESTAT 1309
  • Maintenance or Repair: Explanation operates like a charging provision from 1-6-2007 incorporated into law by Finance Act, 2007. This explanation cannot be read as retrospective in nature following the ratio laid down in Martin Lottery case STO 2009 SC 857 and the appellants shall not be brought to the ambit of tax for the period 9-7-2004 to 30-9-2005 when the explanation was inserted to the above section w.e.f. 1-6-2007 by Finance Act of 2007.

  • STO 2013 CESTAT 1311
  • Management, Maintenance or Repair Service: Maintenance collected from flat owners for providing maintenance is in the nature of reimbursable expenses: Partial stay granted.

  • STO 2013 CESTAT 1276
  • Maintenance and Repair Services: Appellant due to lack of advice did not file reply to the show cause notice nor did he appear before the adjudicating authority and convince him regarding no tax liability arises thereon: Directions issued for partial pre deposit.

  • STO 2013 CESTAT 1258
  • Maintenance or Repair Service: Demand: Stay: value of materials used in repair work was not included in the value of service for paying service tax: Applicant eligible for exemption under Notification No.12/2003-ST: Pre-deposit of dues arising out of the impugned order for admission of appeal waived.

  • STO 2013 CESTAT 537
  • Maintenance or Repair Service: Retreading of Tyres: Value of material cost: Demand: Stay: since there are contrary decisions on the issue, the assessee cannot be faulted with, for his entertaining a bonafide belief about the valuation of such services and his contention for granting waiver of pre-deposit: Pre deposit waived.

  • STO 2013 CESTAT 620
  • Maintenance or Repair Service: Demand: Stay: 'Roads' and 'runways' are not one and the same and, therefore, the benefit of exemption available to maintenance or repair of roads will not be ipso facto apply to runways.

  • STO 2013 CESTAT 1005
  • Maintenance or Repair Service: Supply of Tangible Goods: Quantification not Done: Pre deposit waived: Matter remanded.

  • STO 2013 CESTAT 895
  • Maintenance & Repair: Construction Service: Abatement claimed considering it to be construction service: Evidences produced to show that they were eligible for abatement: Matter remanded.

  • STO 2013 CESTAT 1002
  • Maintenance or Repair Service: Non-commercial buildings: services rendered to immovable property under dispute are not liable to service tax at all prior to 16.6.2005. Subsequent to 16.6.2005, exemption from service tax levy for services of maintenance service rendered to noncommercial buildings of Government has been granted retrospectively.

  • STO 2013 CESTAT 712
  • Input Service: Maintenance or Repair: Renting of Immovable Property Output service: Inputs service is defined as any service used by provider of the taxable service for providing output service. In the present case the appellants are provider of renting of immovable property service and maintenance and repair service in respect of area other than 998 Sq. ft. will not' be covered under definition of inputs service as that has not been used in providing the output services. Therefore the appellant are eligible for the Cenvat Credit in respect of service tax paid on Maintenance service in respect of 998 Sq. ft. of the total area.

  • STO 2013 CESTAT 314
  • Management, Maintenance or Repair: Demand: Stay: Appellant collected the amount from flat owners under Section 5 of the Maharashtra Ownership of Flats (Regulation) Act, 1963, as the appellant was obliged to discharge property tax, water and electricity tariff etc. on behalf of the flat owners and the appellant has undertaken these activities in the capacity of an executor. Therefore, the appellant has not rendered any management, maintenance or repair services.

  • STO 2013 CESTAT 621
  • Maintenance or Repair Service: Runway: In common understanding, road and runways are not one and the same. They are distinct and different : Negatived the contentions that maintenance or repair of road would include maintenance or repair of runways: In the absence of a specific exemption in respect maintenance or repair of runways, the benefit of service tax exemption available in respect of roads cannot be extended to runways.

  • STO 2013 CESTAT 784
  • Maintenance or repair: Free service provided by dealer of automobile company: Value of spare parts used reimbursed by the company : Value not includible prima facie: Pre deposit waived.

  • STO 2013 CESTAT 833
  • Maintenance & Repair Service: Servicing of worn out Tyres: Whether amounts to manufacture: directions issued for partial pre deposit.

  • STO 2013 CESTAT 659
  • Maintenance or Repair Service: Operation of power plant cannot come under the definition of Management, Maintenance of Immovable Property: Pre deposit waived.

  • STO 2013 CESTAT 658
  • Maintenance or Repair Service: Demand: Stay: value of material consumed in the retreading process in the invoices separately and therefore they are liable to pay duty on gross amount and not entitled to benefit of exemption under Notification No.12/03-S.T. dt. 20.6.2003: Directions issued for partial pre deposit.

  • STO 2013 CESTAT 366
  • Management, Maintenance or Repair Service: Development fees collected by Builder: Appellant collected the amount from flat owners as under Section 5 of the Maharashtra Ownership of Flats (Regulation) Act, 1963, the appellant was obliged to discharge property tax, water and electricity tariff etc. on behalf of the flat owners and the appellant undertook these activities in the capacity of an executor. Therefore, the ellant has not rendered any management, maintenance or repair Services: Stay granted.

  • STO 2013 CESTAT 245
  • Maintenance & Repair Service: Notification No. 12/2003-S.T.: Value of materials: 10% profit on value of materials: Prima facie value not includible: Stay granted.

  • STO 2013 CESTAT 348
  • Maintenance & Repair Service: Demand: Stay: Value of materials supplied by service receiver: whether the components, parts etc. procured by the Ministry of Defence independently and supplied to the applicants involve 'sale' under Notification 12/2003-ST dated 20.6.03 read with the definition of 'sale' prescribed under Rule 2 (h) of the Central Excise Act, 1944 and accordingly, be excluded from the gross taxable value of service charges: Sample invoices produced and the breakup enclosed therewith shows details of the raw materials supplied and its value: P-facie, at this stage, it would be difficult to say that no sale of the materials was involved, hence, fall outside the scope of Notification 12/2003-ST dated 20.6.03: Pre deposit waived. 

  • STO 2013 CESTAT 483
  • Management, Maintenance or: Repair Service: Penalty: Demand confirmed against the assessee set aside, the question of maintaining any penalty on them does not arise.

  • STO 2013 CESTAT 376
  • Maintenance or Repair: Valuation: Inclusion of value of materials used: materials used for repair cannot be considered as spare parts: Demand sustained for normal period.

  • STO 2013 CESTAT 593
  • Management, Maintenance and Repair Services: They had not included the value of material used in their repair activity for paying service tax: Conflicting judgments available: Larger period cannot be Invoked: Directions issued for partial pre deposit.

  • STO 2013 CESTAT 427
  • Management, maintenance or Repair Service: Exemption of Notfn.No.12/2003-ST: Value of deemed sale involved in the transaction can not be considered for the purpose of Notification No. 12/03-ST. In other words, the deeming fiction can be with respect to the concept of sale, but the same can not be in respect of value of the goods sold. In the present case, the value adopted is on a deemed basis, that is, 70% of the gross amount charged. If the ratio of the larger bench decision is applied to the facts of the present case, the abatement towards value under Notification No. 12/03-ST cannot be extended and the appellant is liable to discharge service tax on the gross amount charged for the transaction.

  • STO 2013 CESTAT 254
  • Management, Maintenance or Repair Service: The appellants collecting security/maintenance deposits from the flat owners. Till such time, the flats are actually handed over to the flat owners, the appellant is liable to discharge statutory obligations such as property tax, water charges, electricity charges, etc. under the Maharashtra Ownership of Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963, which is a statutory requirement. Since the amount is collected for discharging statutory obligations and amount is utilised for incurring those statutory obligations, it cannot be said that the appellant was rendering management, maintenance or repair service to the flat owners.

  • STO 2013 CESTAT 113
  • Repair & Maintenance Service: Demand: Stay: service of repair and maintenance has been performed wholly abroad and as such, there is no evidence adduced by the department to show that part of the maintenance and repair service had been performed in India: Service Tax found unsustainable.

  • STO 2013 CESTAT 374
  • Maintenance or Contract: Demand: Rate contract entered into with the customers for the repairs of the goods for the period prior to 16/06/2005 cannot be considered as a maintenance contract or agreement and accordingly service tax is not leviable on repair services prior to 16/06/2005.

  • STO 2013 CESTAT 250
  • Maintenance & Repair Service: Construction services: Maintenance or Repair of Roads have been given retrospective exemption from 16.6.2005 to 26.7.2009. Similarly, the service rendered in repair of noncommercial government. building has also been given retrospective exemption w.e.f. 16.6.2005 to 1.7.2012: Matter remanded as these issues not examined.

  • STO 2013 CESTAT 230
  • Maintenance or Repair Service: Selling of spare parts: Even in a case of composite transaction involving sale of goods and rendering of service, if the bill/invoices issued clearly shows payment of sales tax/VAT on the spare parts, then the value of such spare parts would not be includable in the gross consideration received for rendering of service: Matter remanded.

  • STO 2013 CESTAT 89
  • Management, Repair Service: Laying of WBM service to RCC road will come within the purview of Management, maintenance and repairs of roads and hence will not be taxable.

  • STO 2013 CESTAT 257
  • Maintenance & Repair Service: Value of parts: Department’s view that parts which are replaced or used for service by the applicants on which VAT has been paid are to be included on the taxable value of the service provided by the applicants: Board’s Circular clarifies about taking decision on the basis of facts and evidence: Pre-deposit waive

  • STO 2013 CESTAT 32
  • Maintenance or Repair Service: Finance Leasing Service: Demand: Stay: In as much as they have paid the service charges to the foreign lessor, they are liable to pay Service Tax as a service recipient under Section 66A of the Act, and this liability squarely lies on them: Directions issued for pre deposit.

  • STO 2013 CESTAT 69
  • Maintenance or Repair: Repair of road exempted retrospectively: Appeal allowed.

  • STO 2013 CESTAT 35
  • Maintenance or Repair Service: Demand: Stay: Works order shows that appellants were required to provide maintenance or repair of linked circuit inter city and intra city: Prima facie case for waiver could not be made: Directions issued for making pre deposit.

  • STO 2013 CESTAT 8
  • Repair or Maintenance Service: Repair and maintenance of non-commercial Government buildings, retrospective exemption has been granted. However, with respect to the Central Railway, the services undertaken is maintenance of various buildings which are all commercial; therefore, the benefit of exemption for non-commercial buildings, prima facie, does not seem to be applicable: Directions issued for partial pre deposit.

  • STO 2013 CESTAT 11
  • Maintenance or Repair Service: Repairs of road: By retrospective amendment brought by Finance Act, 2012 service tax for repairs of road exempted.

  • STO 2012 CESTAT 1095
  • Management, Maintenance or Repair: Government buildings: Exemption from service tax: Stay granted from recovery.

  • STO 2012 CESTAT 1064
  • Maintenance & Repair Service: If the adjudicating authority was having any doubt about the payment of duty service tax by the main contractor, the said doubt should have been expressed to the appellant during the course of adjudication itself, seeking their clarification and directing them to produce further evidence on record so as to satisfy the adjudicating authority: Stay granted.

  • STO 2012 CESTAT 1065
  • Exemption: Construction and repair of roads have been specifically excluded from the scope of levy of service tax by the Government.

  • STO 2012 CESTAT 1001
  • Management, Maintenance or Repair Service: Appellants entered into contract with private persons for repair and maintenance of Railway sidings owned by private parties: As per definition during the material period, appellants liable to pay service tax: Prima facie case not found for total waiver. 

  • STO 2012 CESTAT 1007
  • Maintenance or Repair Service: Tyres retreading is neither repair nor maintenance but reconditioning activity to give a maximum life to tyre and intended to be taxed with effect from 16.6.2005. 

  • STO 2012 CESTAT 1034
  • Maintenance & Repair service: Prior to 01/06/2007, demand on 'maintenance and repair of computer software' is not sustainable under the category of 'Management, Maintenance and Repair Service'.

  • STO 2012 CESTAT 1088
  • Maintenance or Repair Service: Repair of Road: Exemption given from retrospective period: Period covered: Demands set aside.

  • STO 2012 CESTAT 929
  • Maintenance or Repair Service: Computer: Covered under Information Technology Software Service: Excess Cenvat credit utilized: Excess amount paid in cash: Waiver granted.

  • STO 2012 CESTAT 856
  • Maintenance of Immovable Property: maintenance simply does not mean repair. If a property is made useful without making that to be idle, the process carried out to make the property useful involving services warrant consideration for taxability. The services may be plantation, horticulture or any other activity. Partial stay granted.

  • STO 2012 CESTAT 855
  • Maintenace or Repair: From 16.6.2005 repair and maintenance carried out under a contract even other than maintenance contract covered under service tax: Matter remanded for factual verifications.

  • STO 2012 CESTAT 846
  • Management, Maintenance or Repair: Activities of appellants of providing co-ordination services whether would fall under this service or excluded category of BAS to be decided after detailed study: Prima facie all the facts revealed by the appellants in ST-3 returns, hence, invocation of larger period in question: Stay granted.

  • STO 2012 CESTAT 1130
  • Repair & Maintenance: Repairs of road exempted from service tax from retrospective period by Finance Bill, 2012: Demand set aside.

  • STO 2012 CESTAT 895
  • Repair of Road exempted from service tax.

  • STO 2012 CESTAT 732
  • Maintenance or Repair Service: Commissioner (A) holding that services do not fall under this category, but confirms the demand of service tax under Commercial & Industrial Construction Service: Stay granted on the ground that decision is beyond the scope of show cause notice.

  • STO 2012 CESTAT 823
  • Maintenance or Repair Service: Repairing of road exempted from service tax with retrospective effect: Major part of demand on this account: Pre deposit requirement waived.

  • STO 2012 CESTAT 671
  • Maintenance or Repair Service: Repairs of road: Retrospectively exemption granted by the Finance Act, 2012: Demand set aside.

  • STO 2012 CESTAT 685
  • Maintenance or repair service: Repair of roads exempted retrospectively by the Finance Act, 2012. 

  • STO 2012 CESTAT 585
  • Repair and Maintenance Service: Hon'ble High Court has struck down the said circular dated 07.10.2005, holding that the circulars cannot override the provisions of Sections and held that the service tax liability under repair and maintenance of Computer software would be only with effect from 01.06.2007.

  • STO 2012 CESTAT 722
  • Maintenance or Repair Services: Appellants provided certain services to lesees under a lease agreement: As per Board Circular activities performed by the public authority are not taxable: Prima facie case for waiver of stay made out.

  • STO 2012 CESTAT 896
  • Repair of Road exempted from service tax for the period from 16.6.2005 to 26.7.2009.

  • STO 2012 CESTAT 834
  • Maintenance or Repair Service: Activity of construction of road exempted from levy of Service Tax by insertion of Section 97 of the Finance Act, 2012, an amendment has been made and as per the said amendment, the activity of “management, maintenance and repairs of road services" has been exempted from levy of Service Tax during the period 16.6.2005 to 26.7.2009

  • STO 2012 CESTAT 541
  • Maintenance or Repair Service: Tax demanded on PMP certificates and royalty paid by appellants to Whirlpool: PMP certificate purchased: Service tax is not commodity taxation but only upon providing taxable service, levy of service tax is permitted by Finance Act, 1994: There is no dispute that PMP certificate is relatable to Maintenance & Repair of Whirlpool products since buyers of products of the said concern get assured post sales service.: Speaking order bad in law, hence, set aside.

  • STO 2012 CESTAT 516
  • Maintenance or Repair Services: Repairs of road: Service exempted from retrospective effect.

  • STO 2012 CESTAT 543
  • Management, Maintenance or Repair Service: Appellants provided Information Technology Software service which was not taxable prior to 16.05.2008, hence it was not open for the department to demand service tax under MMR service: Prima facie made out for waiver: Stay granted.

  • STO 2012 CESTAT 449
  • Maintenance or Repair Service: Government granted exemption from collection of service tax on repairing of roads during the period from 16th day of June, 2005 to the 26th day of July, 2009: Appeal allowed.

  • STO 2012 CESTAT 443
  • Maintenance services: If they were doing maintenance for themselves, there would not have been any reason for collecting the exact amount of service charges along with tax from the shop keepers.

  • STO 2012 CESTAT 387
  • Repair & Maintenance Service: hiring out the cranes to stand alone parties for whom there was no agreement and Service Tax liability does not arise. Matter remanded.

  • STO 2012 CESTAT 315
  • Maintaince or Repair Service: During the relevant period only services provided under a contract or agreement were taxable.

  • STO 2012 CESTAT 326
  • Maintenance Service: Computer treated as goods prior to 1.6.2007: No tax.

  • STO 2012 CESTAT 505
  • Maintenance or Repair Service: insofar as the job works undertaken by the appellant on IC engines/parts (of motor vehicles) brought from authorised service stations/workshops are concerned, the appellant was providing the taxable service viz., maintenance or repair service for the period from 16.6.2005 to 30.4.2006.

  • STO 2012 CESTAT 260
  • Maintenance or Repair Service: Demand: Stay: there was no contract or agreement in the case of the assesses, which is one of the pre-requisites for charging service tax under the heading 'maintenance and repair service': Stay granted.

  • STO 2012 CESTAT 231
  • Maintenance & Repair service: Services provided under various contracts: Value of service component and materials can be separated and benefit of Notfn.No.12/2003-ST admissible: Whether on the basis of quantum of VAT paid value can be determined is question to be decided in final hearing: Stay granted on prima facie case. 

  • STO 2012 CESTAT 203
  • Maintenance or Repair Service: On the submissions of the appellants that they were not in a position to produce all documents to prove the cost of material supplied and also service tax liability based on actual receipts for concerned periods. Besides it was also found that they had already deposited Rs.6.00 lakhs out of total demand: Hence matter remanded to the adjudicating authority.

  • STO 2012 CESTAT 156
  • Management, Maintenance & Repair: Demand: Once road is not covered by Transfer of Property Act,, as per definition of MMR roads cannot be considered as immovable property and it is inconceivable to tax the service provided in respect of property of Municipality.

  • STO 2012 CESTAT 104
  • Maintenance or Repair: Service provided for containers: Appellants issued invoices on the basis of contract/agreement: Prima facie case not made out for total waiver.

  • STO 2012 CESTAT 106
  • Maintenance or Repair Service : Works contract: Contract with NHAI for construction of road, NHAI deducted VAT before making payment to the appellants: Stay granted looking to the similar issue decided in favour by the co-ordinate bench.

  • STO 2012 CESTAT 165
  • Management, Maintenance or Repair Service: Stay: Commissioner (A) did not consider the appeal on merit and directed to make pre deposit of entire service tax and interest : Value of materials supplied with repairs of machinery in dispute: Directions to deposit issued and matter remanded to Commissioner (A).

  • STO 2012 CESTAT 258
  • Immovable Property: Maintenance & Repair service provided to immovable property was not taxable before 10.4.2006: Value of parts sold is required to be deducted in terms of Notification.No.12/2003-S.T. 

  • STO 2012 CESTAT 153
  • Maintenance or Repair or Construction Service: Facts to be examined from Works Contract and law for both services is different: Matter remanded back.

  • STO 2012 CESTAT 284
  • Maintenance or Repair Service v/s Business Auxiliary Service: Repairs undertaken by the appellant were in relation to the sale of machines by M/s L & T Komatsu Ltd. and, therefore, the appellant's services squarely fall within the ambit of the definition of 'Business Auxiliary Service'.

  • STO 2012 CESTAT 403
  • Demand: cenvat credit: GTA service credit admissible: expenses on shifting of household goods not admissible: tyre retreading is falling under maintenance or repair service: credit admissible.

  • STO 2011 CESTAT 323
  • Service Tax: Management, Maintenance or Repair Services: Demand: Waiver of pre-deposit: Re-treading of the old tyres may get covered under the category of ‘Management Maintenance or Repair Services’ from 16.6.2005 and the appellant may be eligible for the benefit of abatement given under Notification No. 12/2003-S.T. The appellant has not made out a case for complete waiver of the demands made by the lower authorities. Subject to payment of stipulated deposit, the condition for pre-deposit of the balance amount involved is waived and recovery thereof stayed till the disposal of the appeal.(Para 5)

  • STO 2011 CESTAT 297
  • Repair & Maintenance: Demand: No evidence that appellants were authorized service provider of any manufacturer: Demand cannot be made on presumptions.

  • STO 2011 CESTAT 315
  • Service Tax: Maintenance or Repair Services of the software: Demand: Taxability: It is established that during the period from 09.07.2004 to 16.05.2008, Information Technology Software Services were not covered under Maintenance or Repair Service. He produces a copy of the said Final Order.(Para 4).The application for waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of the appeal.(Para 6). 

  • STO 2011 CESTAT 140
  • Service Tax: Maintenance and repairs service: Demand: Bonafide belief: The introduction of service tax law on maintenance or repairs was in initial stage during the relevant period and the perusal of rate of contract entered by the appellant would indicate that the amount paid for job done and hence can be considered as a rate contract, there could be a legitimate understanding of the appellant that they are not liable to discharge service tax liability under the maintenance or repair services. In view of this, the demand which is confirmed by the adjudicating authority by upholding invokations of larger period is not on sound reasoning and is liable to be set aside(Para 10). The appellant were not charging service tax on the invoices raised by them to KTPS and hence the amount collected by them needs to be considered as cum-duty amount. Matter remitted back to the adjudicating authority.(Para 11). There could be a legitimate belief of the appellant that they are not liable to discharge the service tax liability as per the agreement entered by them due to which the appellant may not have discharged service tax liability under section 73(1) of Finance Act, 1994. Therefore, invoking the provisions of section 80, the various penalties imposed on the appellants are set aside.(Para 12). 

  • STO 2011 CESTAT 153
  • Service Tax: Management, Maintenance or Repair Services: Demand: It stands clarified by the Board 'Circular vide F. No. F/332/16/2008-TRU dated 03.6.2008, that maintenance or repair of roads are leviable to service tax under the management, maintenance or repair services. Further, the said issue stands clarified by the Board vide their subsequent Circular No. 110/4/2009-ST dated 23.2.2009, clarifying that while construction of roads is under taxable services, management, maintenance or repair of roads are in the nature of taxable services attracting service tax. As such, there are no merits in the appellant's contention.(Para 4). Ordered to make partial pre-deposit and on compliance, the pre-deposit of balance amount of duty and entire amount of penalties imposed under various sections of the Finance Act, 1994 shall stand waived and its recovery is stayed during the pendency of appeal.(Para 6).

  • STO 2011 CESTAT 199
  • Service Tax: Manpower Recruitment or Supply Agency: Penalty: It cannot be held that the assessee could manage the affairs of her business during the material period but could not pay the tax due owing to the mental strain and pressure suffered by her during the same period. This penalty is reduced to an amount equal to the tax demanded. The appeal is disposed in the above terms. (para 4)

  • STO 2011 CESTAT 290
  • Transportation of Goods by pipeline: Dry fly ash transported through pipeline to manage the disposal of fly ash, essence of contract being “Maintenance & Repair” not a service of transportation of goods through pipeline.

  • STO 2011 CESTAT 232
  • Service Tax: Management, Maintenance and Repair Services: Retreading of Old Tyres: Contract or Agreement need not be in writing: The meaning of 'repair or maintenance' under section 65 (64) of Finance Act, 1994 during the material period does not necessarily require a written contract or agreement to be entered into by the parties. There was no need of any written contract or agreement to bring the appellant to the fold of law. In the absence of legislative mandate that the contract should necessary be in writing, there is no scope to grant relief for which the appeal is dismissed. (para 10.3)

  • STO 2011 CESTAT 179
  • Service Tax: Demand: Remand: The arguments raised by Revenue are not the basis on which the demand is confirmed. In these circumstances and in view of the contentions raised by both sides, matter needs to be reconsidered by the adjudicating authority. The impugned orders are set aside without going into the issue of limitation and a matter is remanded to the adjudicating authority for de-novo adjudication. Appeals are disposed of by way of remand.(Para 11).

  • STO 2011 CESTAT 343
  • Maintenance and Repair Service: Repair of shells used by sugar mills on job work basis: Taxable: Conditional stay granted.

  • STO 2011 CESTAT 31
  • Service Tax: Management, Maintenance or Repair Services: Pre-deposit: Prima facie case for the appellant in view of the tribunal’s decision in CMS(I) Operations & Maintenance Co. P. Ltd. case (supra) wherein the pith and substance rule was invoked to hold that the main function of the assessee was to operate the power plant and the maintenance/repair was only incidental thereto and further that such maintenance and repair of the power plant was not a service rendered to another person. This matter, is debatable, for which both sides will have to wait for final hearing of the appeal. Grant waiver of pre-deposit and stay of recovery in respect of service tax (with interest) and penalty amounts. (para 4)

  • STO 2011 CESTAT 61
  • Service Tax: Maintenance or repair of software: Pre-deposit: The issue regarding the maintenance and repair services i.e., SAP systems was an issue before the coordinate bench in the case of M/s. SAP India Pvt. Ltd. (supra), wherein it is held that the said services would be taxable only from 16.5.2008. In this case the appellant is using the said SAP system and the same is maintained by their parent company situated abroad. The appellant has made out a prima facie case for the waiver of the pre-deposit of the amounts involved. (para 6)

  • STO 2011 CESTAT 187
  • Service Tax : Maintenance and Repair Services: Demand: Retreading of tyres whether amounts to manufacture or activity under service tax: It is established that that retreading of tyres will fall under the category of "maintenance and repair services(Para 5). Rule 5 (1) of the Service Tax (Determination of Value) Rules, 2006 provide that any expenditure or cost incurred by the service provider in the course of providing taxable service, such expenditure would be treated to be included while arriving at the taxable value. Partial pre-deposit ordered and subject to compliance, application for waiver of the balance amounts involved is allowed and recovery thereof stayed till the disposal of the appeal.(Para 7). 

  • STO 2010 CESTAT 584
  • Service Tax : Renting of Immovable Property', and 'Management, Maintenance or Repair Services : Taxable event : Demand : Service tax liability on 'Renting of Immovable Property' was brought into service tax net in the Budget of 2007-2008 and consequent to the said Budget, clarification issued by the Central Board of Excise & Customs vide letter  D.O.F. No. 334/1/2007-TRU, dated 28.2.2007 indicates that vacant land, whether or not having facilities clearly incidental to the use of such vacant land, is excluded from the scope of this service. The appellant has rented out the vacant land adjacent to their premises for storage and warehousing in emergency situation. Prima facie, this activity may not fall under the category of 'Renting of Immovable Property'. As regards the 'Management, Maintenance or Repair Services', the agreement entered by the appellant is for the activity of operation and maintenance of mud plant wherein the appellant mixes certain materials in the mud plant. Prima face this activity of operation and maintenance of mud plant may not get covered under 'Management, Maintenance or Repair Service'. Accordingly, application for waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of the appeal.(Para 5).

  • STO 2010 Guj 805
  • Service Tax: Scientific & Technical Consultancy Services: Demand: Period of limitation: As to whether there is any suppression or mis-statement with intent to evade payment of duty is a question of fact and the Tribunal upon appreciation of the evidence on record has found as a matter of fact that there was no suppression or misstatement. Moreover, in the light of the fact that there was confusion prevailing in respect of the controversy in issue at the relevant time, the assessee was entitled to entertain a view that the services rendered by it did not fall within the ambit of management consultancy services. On behalf of the revenue nothing has been pointed out to the contrary to dislodge the findings recorded by the Tribunal so as to persuade the court to take another view. In the circumstances, it is not possible to state that the Tribunal has committed any legal error so as to warrant interference.(Para 8). Revenue appeal dismissed. 

  • STO 2010 CESTAT 558
  • Service Tax: Maintenance or repair services, under Section 65(105)(zzg) read with Section 65(64) of the Finance Act, 1994 / Information technology software service: Taxable event: Demand: It is pertinent to note that adaptation, up-gradation, enhancement, implementation, etc. of information technology software are expressly covered by the definition of 'information technology software service’ and that these very operations have also been specified as different categories on software maintenance in the literature. Thus there is almost total convergence between the technical literature on ‘software’ and the definition of ‘information technology software service’ given under Section 65(105)(zzzze) of the Finance Act, 1994.(Para 5.5). It is settled law today that a new taxable service covered by specific entry under Section 65 of the Finance Act, 1994 will not attract levy of Service Tax under any pre-existing entry.(Para 5.6). The maintenance charges collected by the appellant from their customers during the period from 09.07.2004 to 31.01.2006 are not liable to be subjected to levy of Service Tax under the head 'maintenance or repair service' under Section 65 (105) (zzg) read with Section 65 (64) of the Finance Act, 1994. The services rendered by the appellant to their customers are in the nature of information technology software service which was made taxable w.e.f. 16.05.2008 only. Such service is not to be subjected to levy of Service Tax under any other entry. Therefore, the demand of Service Tax and the connected penalties are only liable to be set aside.(Para 6). 

  • STO 2010 CESTAT 552
  • Service Tax: Management, maintenance or repair services: Repair of motor vehicles / I.C. Engine: Scope: Adjudicating authority conclude that the IC Engines are goods and that is entirely different from motor vehicles. The legislative intention appearing from sub-clause (a) of Section 65(64) (ii) of its finance Act, 1994 is in relation to certain activities independently or in association with other activity relating to motor vehicles. There is nothing in the provisions of law about the definition of motor vehicles when repair or maintenance of motor vehicle is excluded from purview of levy. When service provided by "authorized services station" is brought into the fold of law by entry in section 65 (9) of the Finance Act 1994, the intention of legislature under sub-clause (a) of Section 65 (64) (ii) may be to exclude motor vehicles, as such' or its parts and components repaired by a manufacturer or its authorized person in terms of this section. Noticing in this sub-clause contains an independent entry, meaning of motor vehicles cannot be interpreted to exclude its parts and components. What that is commonly understood is that when a motor vehicle is sent for repair, part or components thereof, are usually repaired. In the absence of precise definition of "motor vehicle", it is not possible to construe the meaning of such term otherwise aforesaid. Pre-deposit waived(Para 7,8,9).

    Stay granted.

  • STO 2010 CESTAT 352
  • Service Tax : Management, Maintenace & Repair Service : Pre-deposit : The period involved in this case is 9.07.2004 to 30.04.2006 and at that time the applicant was aware of the Board’s circular dated 17.12.2003 which was not withdrawn till 9.05.2007 and in the definition of maintenance services, clause (b) ‘maintenance or repair of properties whether immovable or not ‘was substituted only with effect from 1.05.2006. However, the Board’s circular dated 17.12.2003 remainder in force till 9.05.2007. In the circumstances, the Pre-deposit of duty, interest and penalty is waived and recovery of the same is stayed during the pendency of the appeal

  • STO 2010 CESTAT 350
  • Service Tax: Condonation of Delay: Sickness of proprietor: Medical Certificate produced : The application for condonation of delay is allowed and the appeal is admitted. (para 2)

    Service Tax: Management, Maintenance & Repair Service: Tax liability on sub-contractor: Pre-deposit: The applicant has submitted that they are sub-contractor of M/s. Xerox India who had paid the service tax in the case and which has not been contested by the department. Waiver of the pre-deposit of service tax along with interest and penalties and the recovery of the same is stayed during the pendency of the appeal. (para 3)

  • STO 2010 CESTAT 302
  • Service Tax: Management, maintenance & repairs services: Section 73(3): Waiver of Show cause notice: In view of the fact that before issue of show cause notice, service tax and interest was paid, the benefit of Section 73(3) of Finance Act, 1994 would be available to the appellants and therefore the show cause notice should not have been issued to the appellants. (par 4)

    Service Tax: Management, maintenance & repairs services: Penalty: Section 80: In view of the observations regarding newly introduced tax and the nature of the firm, the benefit of lenient view available under Section 80 of Finance Act, 1994 can also be extended to the appellants. Under these circumstances, penalty imposed under Section 76 is also required to be set aside. However penalty under Section 77 of the Act which is for contravention of various rules and for not filing the return, has to be sustained. (para 4)

    Service Tax: Management, maintenance & repairs services: Cum-Tax value: Remand: In view of the provisions of Section 67 of Finance Act, 1994, the amount received has to be treated as inclusive of tax. The matter is remanded to the original adjudicating authority for the limited purpose of calculation of the correct amount of service tax payable by treating the amount received by the appellants as inclusive of service tax. (para 4,5)

  • STO 2010 CESTAT 491
  • Service Tax: Maintenance or Repair services: Pre-deposit: The payments involved are reimbursement of expenditure and not consideration received by the appellants for any service.

    Service Tax: Cenvat Credit: Rule 6 (3) of Cenvat Credit Rules: Pre-deposit: Appellants constructed the flats and transferred to the land owners in exchange for land received. No services are involved in this transaction; there are no exempt services. Therefore, Rule 6(3), of the Cenvat Credit Rules has been incorrectly invoked to demand Cenvat Credit availed by the appellant in excess of 20% of the aggregate input service credit. The impugned demands and penalties are not sustainable. Order complete waiver of the dues adjudged against the appellants pending decision in the appeal.

  • STO 2010 CESTAT 322
  • Service Tax: Management, Maintenance & Repair Services: Picking & Cleaning Services: Penalty: Section 80: Considering the fact in this case also that the appellant was not aware of the legal provisions of the service tax, who is a small tax payer, the benefit of Section 80 of the Finance Act is given to the appellant. Accordingly, the penalties against the appellant are waived. With these terms, the appeal is allowed. (para 6)

  • STO 2010 CESTAT 337
  • Service Tax: Maintenance and Repair Services : Retreading of tyres: Cost of Material consumed in providing the service: The adjudicating authority having accepted that the assessees were paying sales tax on the materials consumed obviated the necessity for remanding for verification as to whether sales tax liability has been discharged by the assessees. The impugned order is set aside and allow the appeal. (para 2,3)

  • STO 2010 CESTAT 332
  • Service Tax: Extended Period: Suppression: Pre-deposit: It is settled that a demand notice which invokes the extended period of limitation under the relevant provision of low should clearly allege the necessary facts constituting one or the other ingredient laid down in the said provision for invoking the extended period. This essential condition, it appears, has not been fulfilled in this case. Waiver of pre-deposit and stay of recovery in respect of the adjudged dues, considering the plea of limitation raised by the appellant. (para 2)

  • STO 2010 CESTAT 279
  • Service Tax : Management, Maintenance or Repair Service : Retreading of Tyres : Penalty : No allegation of suppression : The penalties confirmed against the appellants without any coercive finding against the appellants are not sustainable in this case. The Revenue has not discharged the burden of proof that the appellant has suppressed the facts with intent to evade payment of Service Tax. There is no allegation of suppression in the show-cause notice also. Penalty is not warranted in this case against the appellants. Accordingly, the impugned order to the extent of imposition of penalties is set aside. (para 6)

  • STO 2010 CESTAT 254
  • Service Tax: Maintenance & Repairs Services: Retreading of tyres: Penalty: The definition of service tax under the category of Maintenance and Repairs was extended only w.e.f. 16.6.05 onwards, thus bringing the appellant under the net of service tax. The appellant plea that they were under bonafide belief that they were exempted till 4 lakh clearance cannot be doubted. They have deposited the entire service tax with interest, in which case, extension of benefit of Section 80 of Finance Act cannot be held to be unjustified. (para 3)

  • STO 2010 CESTAT 329
  • Service Tax: Management, Maintenance and Repair services: Bar of Limitation: Pre-deposit : Appellant entertained a consistent view that he is providing services which falls under BAS. If that be so, the show cause notice issued on 31/03/2008 without considering the appellant’s letter dt. 25/04/2004 cannot invoke extended period, as nothing prevented Revenue from pursuing the issue further, based on letter of the assessee. Only on the point of limitation, the application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till the disposal of the appeal. (para 7)

  • STO 2010 CESTAT 206
  • Cenvat Credit: Input service: Gardening services used in or in relation to the business activity: Credit admissible: Issue well settled.

  • STO 2010 CESTAT 66
  • Service Tax: Maintenance and Repair Service: Retreading of Tyres: Penalty: Sub-Section (3) of Section 73 of the Act restrains the department from issuing any show-cause notice for demand of service tax from an assessee where they have already self-determined and paid up the tax under intimation to the department. This provision of law in no manner restrains the authorities from taking penal action against such an assessee for default / delay of payment of service tax. The lower authorities have, however, chosen to impose a penalty equal to service tax on the assessee and the department has no grievance in this behalf. In the result, the appeal gets dismissed. (para 3,4)

  • STO 2010 CESTAT 82
  • Service Tax: Penalty: Burden to establish suppression: The burden on the Revenue to establish suppression on the part of the assessee with intention to evade payment of tax has not been discharged. The penalties imposed under Sections 76 and 78 set aside, the assessee do not challenge the penalty of Rs.1,000/- imposed under Section 77 of the Act - and allow the appeal. (para 2)

  • STO 2009 CESTAT 1652
  • Service Tax: Maintenance and Repair Services: Benefit under Notification No.12/2003-ST dated 20.6.03: The issue as to whether the benefit of Notification No.12/2003-ST dated 20.6.03 is available to materials such as patches etc. consumed during the course of carrying out the activity of retreading of tyres (such activity is liable to tax under the heading `Maintenance and Repair Services') stands prima facie settled in favour of the assessees by the apex court's decision in Commissioner Vs Shilpa Colour Lab. [2009 (14) STR J163 (SC)].(Para 1).

    Stay granted.

  • STO 2009 CESTAT 1491
  • Service Tax: After sales service provider on behalf of the Eureka Forbes: Scope and liability: The appellant operated under an agreement and work order. The terms of agreement appears to be a case of franchise agreement. This appellant on behalf of Eureka Forbes was rendering repair services only. But the Department has alleged against the appellant that it had provided two categories of services one is maintenance and repair and other is business auxiliary services. Show cause notice does not mention carrying out of repair activity under an agreement. Rather, the appellant was acting as an agent of Eureka Forbes to provide after sales service as guaranteed by the earlier. The appellant being a small service provider is entitled to the benefit of Notification No.2/2005 dated 1.3.2005. There is also no speaking order as to how the appellant has provided business auxiliary service. The non speaking order shall not bring the appellant to service tax net.(Para 1,3).

    Stay granted.

  • STO 2009 CESTAT 1367
  • Service Tax: Maintenance and Repair services: Scope: Mere painting and stenciling on the cylinders will not get covered under the "Maintenance & Repair Services." In an identical issue in respect of the very same appellant, this bench had granted unconditional waiver by stay order No.1086/09 dated 20th August 2009.(Para 4).

    Stay allowed.

  • STO 2009 CESTAT 1386
  • Service Tax: Maintenance or Repair Services during the period 01.07.2003 to 31.03.2005: Scope and liability: The issue involved in this case is regarding the Service Tax liability on the activity of repainting, surface preparation of cylinders, punching and stenciling of name and logo, on cylinders. The applicants have undertaken to do the certification testing of the cylinders for the oil companies, on which they are discharging the Service Tax liability. The Board in their Circular No.B1/6/2005-TRU dated 27.07.2005 had clearly clarified that “maintenance or repair carried out under a maintenance contract or agreement was covered under service tax. Repair or servicing carried out under a contract other than a maintenance contract or agreement was not covered within the purview of service tax. Maintenance or repair, including, reconditioning or restoration or servicing of any goods or equipment, except motor vehicle (which is taxable under the category of authorized service station), undertaken as part of any contract or agreement (not necessarily maintenance contract or agreement) is now liable to service tax under this category of taxable service." This circular was issued by the board after the amendment of the definition of maintenance or repair service is in favour of the assessee.(Para 6.1).

    Stay allowed.

  • STO 2009 CESTAT 1305
  • Management, Maintenance or Repair Service: Immovable Property: Activities of growing of grass, plants, trees or fruits, vegetable, regular mowing of lawns, pruning & trimming of shrubs and cleaning of garden, would not come within the ambit of "maintenance of immovable property". Appeal of Revenue rejected.

  • STO 2009 CESTAT 1023
  • Service Tax: Management Consultancy Services" provided during the period from 01.04.2001 to 31.03.2002: Scope and liability: From the definition of the Management Consultant, it is clear that for the purpose of levy of service tax, any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organization, in any manner, is a Management Consultant. Thus the ambit and the canvas of the Management Consultancy Service/Management Consultant is very vast. The words used are “any person”, “directly or indirectly”, “in connection with”, “in any manner” and “includes”, which means that the domain is very wide. The Board, vide Order No.1/1/2001-ST dated 27.6.2001 issued under Section 37B of the Central Excise Act, 1944, has clarified that the term Management is broad term to cover various functions and the multifarious activities required for efficient and effective functioning of an organization and the term Management Consultancy is wide enough to include advisory services rendered on any aspect of Management. The services rendered by the applicants as indicated in the Support Agreement dated 05.05.2001 are prima facie in the nature of Management Consultancy Services relating to production, finance and marketing etc.(Para 6,10).

    Pre-deposit ordered.

  • STO 2009 CESTAT 1130
  • Service Tax: Maintenance and repair services for the period July 2003 to March 2005: Scope and liability: The 'Board's Circular No BI/6/2005-TRU dated 27.7.2005 clarifies as the taxability of services under "maintenance or repair". Prior to 16.6.2005, maintenance or repair carried out under a maintenance contract or agreement was covered under the service tax. Repair or servicing carried out under a contract other than a maintenance contract or agreement was not covered within the purview of service tax. Maintenance, or repair, including reconditioning or restoration or servicing of any goods or equipment, except motor vehicle which is taxable under the category of authorized service station), undertaken as part of any contract or agreement (not necessarily maintenance contract or agreement) is now liable to service tax agreement under this category of taxable service. To attract service tax under this category, the contract or agreement need not necessarily be a maintenance contract/agreement." In view of the above reproduced Board's circular, prior to 16.6.05, it is difficult to construe that operation and maintenance carried out by the applicant is liable for service tax. The applicant has made out a prima facie case for complete waiver of the dues(Para 5).

    Stay granted.

  • STO 2009 CESTAT 942
  • Service Tax: “Maintenance and repair service” for the period from 1.7.2003 to 15.6.2005 and that of "Management, maintenance and repair" for the period from 16.6.2005 to 30.9.2007: Scope and Liability: The appellants are not the owners of the power plant. In terms of the operations and maintenance contract, the appellants are required to operate and maintain the power plant. This point is very clear on going through the contract. This is not a contract for just "maintenance and repair" or "management, maintenance or repair". The ultimate objective of the power plant is generation of electricity. The activities of repair and maintenance would be, only incidental. Moreover, in the Rolls Royce Industrial Power (I) Ltd. Vs. Commissioner.- STO 2004 CESTAT 102. Even though, the present appeal relates to "maintenance and repair" and "management, maintenance and repair", the ratio of the above Rolls Royce Case is squarely applicable. The appellant under the contract is to operate the entire power plant and maintain it. That is why it is known as the "operation and maintenance contract". Once the appellant undertakes to operate and maintain the power plant under a contract, it can not be said that the appellant is rendering a service to the owner of the power plant. Pre-deposit waived. (Para 5.1)

    Stay granted.

  • STO 2009 CESTAT 990
  • Service Tax: Maintenance & Repair Services, Commissioning & Installation. Services and Testing, Inspection & Certificate Services: Scope and liability: The findings of the Commissioner (A) very clearly indicate that the services rendered by the appellants viz. “Maintenance and Repair Services; Commissioning and installation services; and Testing and Inspection Certificate Services" are not disputed by the appellants. The appellants have obtained the registration in February 2005. The said services came under Service Tax net from: 1.7.2003. The information regarding the past transaction i.e., prior to the taking of the registration, was not furnished by the appellants to the authorities and they furnished the same only, after the appellants were asked by the department to do so. The only contention of the appellant is that there is no need for imposition of penalties as they have paid the entire amount of Service Tax and interest, thereof, during the pendency of the issue before the Adjudicating Authorities. The appellants did not respond to the various letters written by the authorities as regards the past transactions. It took seven months for the appellant to declare their past liabilities. If it is the contention of the appellant that they were under bona fide impression, they should have declared their past transactions prior to obtaining the service tax registration as soon as they received the first letter from the lower authorities. In view of this, the findings of the Commissioner (A) are correct and there is no reason for interference of the said order.(Para 5.1,5.2,5.3)

    Appeal rejected.

  • STO 2009 CESTAT 792
  • Service Tax: Maintenance and repair of ships during 1.4.2005 to 15.6.2005: Scope and liability: The issue involved in this case is identical to the issue as was before this bench in Appeal No.ST/211/2006 in respect of the very same appellant for an earlier period setting aside the impugned order therein and allowed the appeal.(Para 3,5.1).

    Appeal allowed.

  • STO 2009 CESTAT 845
  • Service Tax: Activity of repairing transformers: Maintenance or repair service: Scope and liability: It appears that the Board's Circular No MF (DR) letter F. No. B1/6/2005-TRU dated 27.07.2005 have not been properly examined. The lower authority should consider the said Circular and impose the service tax on them only with effect from 16.06.2005. It is seen that the Original authority has not examined the issue in the light of the Board's Circular. Therefore, matter is remanded to the Original authority to examine the issue in the light of the Board's Circular and to take a decision accordingly.(Para 4).
    Matter remanded.

  • STO 2009 CESTAT 312
  • Reconditioning of Old M S Rollers: Removing the remnants worn out/ damaged rubber components  from Old and used M.S.Rollers and re-rubberise them by subjecting them to vulcanization amounts to reconditioning. Activites could be considered as reconditioning and Prima facie liable to service tax under the head 'repair and maintenance service'. Predeposit ordered.

  • STO 2009 CESTAT 426
  • Maintenance and Repair Services: Repair work undertaken without maintenance contract was not exigible to service tax prior to 16.6.2005.

  • STO 2009 CESTAT 343
  • Service Tax: Service Tax: Management, maintenance or repair services: Activity of shelling, deshelling, and reshelling of old and worn out sugar mill roller supplied by various sugar mills: The process undertaken by the applicant amounts to reconditioning of old and worn out sugar mill rollers. The word "reconditioning" introduced in the definition on 16.5.05 and the applicant opted registration and paid the tax. Show cause notice was issued on 24.1.08. Prima facie, it is noticed that there was no intention to evade payment of tax. In view of that pre-deposit of tax and penalty is waived(Para 6).

    Stay granted.

  • STO 2009 CESTAT 369
  • Service Tax: Maintenance and Repair service from September 2005 to June, 2006: Activity of whitewashing, distempering, painting of various buildings in Plant and compound area at GNDTP: Scope and liability: The service under the category of "Construction of residential/commercial complex" may apply to the activities of glazing, plastering, painting, floor and wall tilling. There is no finding on the claim of the appellant in the impugned order. So it is required to examine the claim of the appellant as to whether this activity would come within with purview of the "Construction of Residential/Commercial complex" service, while deciding the appeal hence matter remanded back (Para 5).

    Appeal allowed by way of remand.

  • STO 2009 CESTAT 107
  • Maintenance or Repair service: Appealants not directly authorised by manufacturers of the machines, they cannot be considered to fall under the category of maintenance or repair service as it stipulates that the service shall be "provided by manufacturer or any person authorised by him". Stay Granted . Predeposit waived.

  • STO 2009 CESTAT 116
  • Maintenance & Repair Service: Penalty: Service tax with interest paid immediately being pointed out : Penalties set aside.

  • STO 2009 CESTAT 50
  • Service Tax: Maintenance and repair' service rendered during the period 16.6.2005 to 31.8.05: Retreading of old tyres : Liability: The appellants are eligible for exemption in terms of Notification No.12/03 - ST dated 20.6.03 if it produced documentary proof for having sold material to its clients in the course of rendering 'maintenance and repair' service. The assessee is also assessed to Sales Tax and has paid re-sale sale tax for the vulcanizing solution and tread rubber used for rebuilding tyres of its customers during the material period. The assessee is eligible for abatement from taxable value equal to the resale value of the material which had been used in retreading tyres and on which it paid sales tax. The original authority shall allow the benefit of the Notification subject to the assessee furnishing evidence for having sold the inputs used in retreading lyres. The appellants are also eligible for getting the taxable value re-quantified considering the total proceeds as inclusive of service tax it has to pay for the service in terms of Section 67 (2) of the Act. Matter remanded(Para 6,7).

    Appeal allowed by way of remand.

  • STO 2009 CESTAT 464
  • Service Tax: Management, maintenance or repair services for the period June 2005 to March 2007: Activity of maintaining and operating a power plant for their client : The impugned demand is on the money collected for operating the plant for generation of electricity. A similar case in Appeal No. S/103/2008 in the case of Operational Energy Group India Pvt. Ltd. Vs. CCE and our final order in another case viz. CMS (I) Operations and Maintenance Co. P. Ltd. Vs. CCE, Pondicherry - STO 2007 CESTAT 103 . After having already considered an analogous case for the purpose of waiver and stay(Para 1).

    Stay granted.

  • STO 2009 CESTAT 467
  • Service Tax: Management or maintenance of immovable property: Activity of operation, repairs and maintenance of power plants: Scope and liability: As the appellant has all along been paying service tax for maintenance of repair service, the amount demanded is towards differential duty on account of amounts collected by the appellants towards operation of power plants under contract/agreement with owners of different power plants. The definition of the impugned services as regards immovable property covered its maintenance or management. Operation of power plant cannot come under the definition of management of immovable property. Therefore, the charges collected by the appellant for the operation of the power plants cannot be held to be towards management of immovable property. (Para 1,2).

    Stay granted.

  • STO 2008 CESTAT 432
  • Service Tax: Waiver of pre-deposit: Demand:The differential demand of service tax is on account of denial of the benefit of Notification No. 12/03-S.T., dated 20-6-2003 whereunder no service tax was payable on the value of goods and materials sold in the course of rendering of Maintenance and Repairs Service and Installation and Commissioning Services. The benefit of the aforesaid Notifications was denied on untenable grounds. After considering the submissions, there is a prima facie case for the appellants. Apparently, the benefit of Notification No. 12/03-S.T., dated 20-6-2003and Notification No. 13/03-S.T.. was admissible to the assessee.(Para 2,3).

    Pre-deposit waived.

  • STO 2008 CESTAT 47
  • Maintenance Vs. Repair: Board’s circular dated 27-7-2005, clarifies that when only repair work was undertaken without a maintenance contract then service tax was not attracted for the period prior to 16-6-2005. Repair arises after the machine fails or gives problem. Maintenance may or may not involve repair. Maintenance is in the nature of preventive action. Department’s appeal rejected.

  • STO 2008 CESTAT 151
  • Repair & Maintenance: Maintenance or Repair Service means any service provided by a person under a maintenance contract or agreement or repair in respect of maintenance or repair of goods. Departmental appeal allowed.

  • STO 2008 CESTAT 134
  • Maintenance & Repair : Agreement regarding rate contract for repair of damaged transformer. No agreement for maintenance of transformer. Repair or servicing carried out under contract other than maintenance was not covered under the purview of service tax.

  • STO 2008 CESTAT 222
  • Extended period: The present demand is for the previous period when maintenance and repair services were not specifically included in the Service Tax net. Moreover, the demand notice has been issued nearly four and a half years after the relevant period, but the relevant provision providing for extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 has not been invoked in the show cause notice. There is also no allegation of fraud, misstatement etc. in the show cause notice. As such, the finding of the Adjudicating Commissioner that he has no hesitation in holding that longer period of limitation is invocable, is an observation which goes beyond the scope of the show cause notice.

  • STO 2007 CESTAT 1241
  • Stay : Management, Maintenance or Repair Service : For the period prior to 16.6.2005 repair or service other than maintenance contract or agreement was not covered within the purview of the service tax. Stay granted.

  • STO 2007 CESTAT 1279
  • Stay : Management, Maintenance or Repair Service : Only re-treading the old and used tyres of their customers and there is no contract or agreement entered with between applicant and the customer. Not covered. Pre deposit waived.

  • STO 2007 CESTAT 1227
  • Stay : Maintenance or Repair : Raw material cost was prima facie held to be not includible in the value of taxable service in view of the Tribunal’s decision in Adlabs v. Commissioner - 2006 (2) S.T.R. 121 (Tribunal).

  • STO 2007 CESTAT 518
  • Service Tax: Liability on maintenance or repair charges: Scope: It is not in dispute that the appellants were liable, during the period of dispute, to undertake maintenance and repairs of the shared areas and common facilities in the building complex for which they were admittedly receiving charges separately from the tenants. The expression 'immovable property' was not defined under the Act during the above period and that the common facilities and shared areas cannot be considered to be part of the 'immovable property'. It is the appellant's own case that they had been collecting rental and maintenance charges separately, under lease deed from each tenant in respect of the immovable property leased out to such tenant. The 'lessee' is bound to pay lease rent at a specified rate per sq. ft. per month and a separate fee called 'operation and maintenance fee' at a specified rate per sq. ft. per month to the 'lessor'. The 'operation and maintenance fee' is also charged at a rate per sq. ft, which itself indicates that the 'operation and maintenance' also pertains to immovable property. Admittedly, this fee was being collected by the appellants from their tenants during the period of dispute and apparently, Service tax was payable on this amount during the period of dispute. (Para 2,3).

    Pre-deposit ordered.

  • STO 2007 CESTAT 537
  • Service Tax: repair-cum-maintenance: Scope: A perusal of the definition of the service during the relevant period shows that reconditioning was not treated as repair cum maintenance during that period. The appellant has a strong, prima facie, case on merits.(Para 3).

    Balance pre-deposit waived.

  • STO 2007 CESTAT 322
  • Management, Maintenance or Repair Service: Inclusion of value of cost of certain components supplied free of cost by the appellants under AMC.

    Debatable issue : Looking to the small amount of tax involved, waiver granted.

  • STO 2007 CESTAT 535
  • Service Tax: Maintenance and repair service: Scope and liability: This activity does not come within the ambit of definition under Section 65(64) of Finance Act under the category of maintenance or repair service up to 16-6-05 only. They were not having any maintenance contract. It was only a work order. Therefore, they were not covered in the relevant category for payment of Service tax. Identical issue was decided by this Bench in Final Order No. 172/2007, dated 31-1-2007 STO 2007 CESTAT 109 wherein it was clearly held that service tax is not leviable in cases where there is no contract prior to 16-6-05.The ratio of Cochin Shipyards Ltd., cited supra clearly applies to the facts of the case. The appellants were not working under any contract. Hence, the cited judgment applies to this case.(Para 2,4).

    Appeal allowed.

  • STO 2007 CESTAT 410
  • Service Tax: Maintainance and repair service: Scope: The appellant, is a small time contractor rendering the services of maintaining the area adjoining Raichur Thermal Power Station (R.T.P.S.), by cutting the jungle bush and construction of bye-pass road for the up-keep of RTPS Plant area. The relevant period involved in the impugned order is 2003-2004. The contention of the appellant is that the service rendered by him falls within the category of maintenance of movable and immovable property taxable with effect from 16-6-2005. However he was forced to register under the category of maintenance and repair services. At present, the appellant pay Service tax. However the Department has not amended the registration certificate by showing the service category as maintenance of movable and immovable properties. This point has not been properly examined by the lower authorities. Therefore, the impugned order is set aside and matter remanded to the original authority to decide the issue afresh(Para 4).

    Appeal allowed by way of remand.

  • STO 2007 CESTAT 581
  • Management, Maintenance or Repair Service: The main contractor means the person who is responsible and obliged under the contract to provide the taxable service. There is no contract and sub-contract. The beneficiary of the service is someone other than the purchaser of the service is altogether irrelevant.

  • STO 2007 CESTAT 109
  • Maintenance: In order to levy Service Tax prior to 16-6-2005, a pure maintenance contract is a must. Demand set aside.

  • STO 2006 CESTAT 242
  • Service Tax: Maintenance and repair services: Scope: Appellant is a Government of India undertaking. Board's circular dated 27-7-2005 has applicability to the facts of the case. The President's Bench has already taken a prima facie view that units which are run by Government of India come under a different footing for the purpose of putting them to terms in the Stay Application, as the burden of deposit has to be shared by Government of India and the amounts are being transferred from one department to another department.(Para 4).
    Pre-deposit waived.

  • STO 2006 CESTAT 788
  • Service Tax: Repair and maintainance service: Scope and liability: Appellants are receiving old and used cylinders and these are being filled by them with paper/cotton felt/rubber for bringing the cylinders in original workable condition so that the cylinders can be put to use in the machine. In these circumstances, there is no infirmity in the impugned order whereby it was held that process undertaken by the appellants comes under the scope of maintenance or repair service. (Para 4).
    The appeal is dismissed.

  • STO 2006 CESTAT 259
  • Service Tax: Maintenance and repair: Scope: Agreement in question is a work contract. The contract provides rates for repair of transformers and also provides guarantee for the transformers repaired by the respondent. As per the Board Circular dated 27-7-2005, prior to 16-6-2005 repair of service carried out under the contract other than the maintenance contract or agreement was not covered within the purview of Service Tax. In absence of any maintenance contract, there is no infirmity in the impugned order.(Para 4).
    Revenue appeal dismissed.

  • STO 2005 CESTAT 182
  • Service Tax: Management Consultant: Scope and taxability: The Commissioner shall decide the matter in the light of the submissions and grounds which have already been brought out by the appellants in the proceedings including their submissions that they were only selling software and it is only sale of goods in terms of the Apex Court judgments in the case of TATA Consultancy Services v. State of Andhra Pradesh STO 2004 SC 306 wherein it has been held that sale of software amounts to sale of goods. As the other issues have not been dealt with by the Commissioner, that should also be dealt with in the de novo proceedings.(Para 2,5).

    Matter remanded for de-novo adjudivation.
     

  • STO 2004 SC 306
  • Consultancy services including Computer Consultancy Services: Canned Software: Whether “goods”: Properties which are capable of being abstracted, consumed and used and/or transmitted, transferred, delivered, stored or possessed etc. are "goods" for the purposes of sales tax. A software programme may consist of various commands which enable the computer to perform a designated task. The copyright in that programme may remain with the originator of the programme. But the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax. Even intellectual property, once it is put on to a media, whether it be in the form of books or canvas (in case of painting) or computer discs or cassettes, and marketed would become "goods”. Liable to pay sales tax.

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