2004 (10) TMI 3 - AT - Service Tax

Service Tax Repairs and Maintenance Non Consulting Engineers Services Stay/Dispensation of pre-deposit of service tax

Summary

Issues:
1. Demand of service tax on Repairs and Maintenance Service provided by the appellants.
2. Challenge against the demand of service tax on calibration of equipments.

Analysis:

1. Repairs and Maintenance Service:
The Appellate Tribunal CESTAT (Chennai) dealt with a case where a service tax of Rs. 2,68,589/- was demanded from the appellants for providing Repairs and Maintenance Service to customers during 1997-98 to 2001-02. The appellants argued that the service was only specified for service tax from 1-7-2003 and should not have been categorized under Engineering Consultancy Service for the period in dispute. The appellants relied on a previous decision by the Tribunal in Rolls Royce Indus. Power (I) Ltd. v. CCE, Vishakhapatnam to support their case. After hearing both sides, the Tribunal found that the appellants had a strong prima facie case based on the cited case law. Consequently, the Tribunal allowed waiver of pre-deposit and stay of recovery for the service tax amount.

2. Calibration of Equipments Service:
In another appeal (No. S/62/2004), the appellants challenged a demand of service tax amounting to Rs. 7,20,452/- for the period 7-7-1997 to 28-2-2002 related to the calibration of equipments. The appellants contended that this service should not be classified as Engineering Consultancy Service, as it was only specified as 'Technical Inspection and Certification Service' for service tax purposes from 1-7-2003 onwards. The Department had previously treated the service as Engineering Consultancy Service for tax recovery. The Tribunal, after considering the arguments presented by both parties, found that the appellants had a strong prima facie case in this instance as well. Consequently, the Tribunal granted waiver and stay for the service tax and penalty amounts in question.

In both cases, the Tribunal observed that the appellants had raised valid points regarding the classification of services for service tax purposes, and based on the cited case law and arguments presented, decided in favor of the appellants by allowing waiver of pre-deposit and stay of recovery for the disputed service tax amounts.