2008 (12) TMI 651 - AT - Service Tax

Summary

Issues:
1. Classification of services provided by the appellants as maintenance or repair services for service tax liability.
2. Authorization requirement for maintenance or repair services.
3. Payment source and classification of services rendered by the appellants.

Analysis:
1. The issue at hand involves the classification of services provided by the appellants as maintenance or repair services for service tax liability. The authorities below have determined that the appellants are engaged in maintenance or repair services, leading to a demand for service tax. The appellants argue that their activities do not fall under this category as they do not directly receive fees from customers but from another company. They contend that the goods are not manufactured by the marketing company they work with, and therefore, they should not be considered as falling under maintenance or repair services.

2. Another crucial issue raised is the requirement of authorization for maintenance or repair services. The appellants assert that since they are not directly authorized by the manufacturers of the machines they work on, they should not be classified as providing maintenance or repair services. They argue that the service tax is being paid by the manufacturer under AMC contracts with individual buyers, and they only receive payments from the marketing company. The Commissioner's finding that the marketing company is also the manufacturer is contested as factually incorrect by the appellants.

3. The source of payment and the classification of services rendered by the appellants are also in question. The appellants highlight that they do not receive fees or remunerations directly from customers but only from the marketing company. They were initially treated as rendering business auxiliary services and later categorized as providing maintenance and contract services. The appellants challenge this reclassification by the department for the interim period, arguing that it is not permissible.

In the final order, the Tribunal considered the submissions from both sides and found that the appellants have established a prima facie case on merits in their favor. Consequently, the Tribunal waived the pre-deposit of dues as per the impugned order and stayed the recovery of dues until the appeals are disposed of. Additionally, the Tribunal directed that the appeals should be linked to connected appeals filed by the Department for further proceedings.