2006 (11) TMI 635 - AT - Central Excise

Summary

Issues involved: Applicability of Service Tax on maintenance and repair services provided by a PSU, interpretation of Board Circular regarding Service Tax liability, applicability of previous Tribunal judgment on similar issue.

Issue 1: Applicability of Service Tax on maintenance and repair services

The appellant, a PSU, provided maintenance and repair services to customers based on quotations. Notification No. 7/2003 brought maintenance and repairs under the ambit of Service Tax. The appellant claimed that they did not have a maintenance contract before 16-6-2005, and therefore, Service Tax should not be levied for the relevant period.

Issue 2: Interpretation of Board Circular and Tribunal Judgment

The appellant relied on a Tribunal judgment in the case of Daelim Industrial Co. Ltd., which was affirmed by the Apex Court, to support their claim for waiver of Service Tax. The appellant argued that the Board Circular and Tribunal ruling should result in a waiver of over &8377; 18 crores in Service Tax confirmed in the impugned order.

Issue 3: Applicability of previous Tribunal judgment

The JDR opposed the appellant's claim, stating that the previous Tribunal judgment pertained to different activities and that the Commissioner had provided detailed findings on the matter. The JDR prayed for the appellants to be put on terms.

In the judgment, the Tribunal noted that the appellant being a Government of India undertaking, the Board's circular had applicability to the case. The Tribunal observed that units run by the Government of India are treated differently in terms of deposit requirements, considering the transfer of amounts between departments. After considering the arguments presented by the appellants, the Tribunal granted a full waiver of pre-deposit and stayed the recovery of the amount exceeding &8377; 18 crores until the appeal's disposal. The Tribunal scheduled the matter for final hearing on 19th January 2007.