2011 (7) TMI 132 - AT - Service Tax

Demand - Maintenance and Repair service - the claim was made that repair work is one time job and was not a job of repeated nature - Since the issue itself has not been considered before the issue of show cause notice or subsequent to issue of show cause notice as to whether repair and maintenance has been undertaken as a result of agreement/ contract, the matter is required to be remanded for considering the legal provisions - Decided in favour of the assessee by way of remand

Summary

Issues:
Service tax liability on repair of Textile Machinery parts without a specific agreement or contract.

Analysis:
The Appellate Tribunal CESTAT, Ahmedabad addressed the issue of service tax liability amounting to Rs. 13,102/- imposed on repair of Textile Machinery parts without a specific agreement or contract for Maintenance and Repair services. The appellant argued that the repair work undertaken did not involve any agreement or contract, and hence, service tax was not applicable. The definition of Repair and Maintenance Service during the relevant period required a specific agreement or contract for services to be liable to service tax. The appellant had responded to a query from the jurisdictional Superintendent stating that the repair work was not based on any agreement or contract, which should have exempted it from service tax. However, the show cause notice was still issued, overlooking this crucial aspect.

The Tribunal noted that the original adjudicating authority failed to consider the fact that the repair work was a one-time job and not a repeated nature job, which would have required an agreement or contract for service tax liability. The Tribunal found that the legal provisions regarding the necessity of an agreement or contract for service tax liability had not been adequately considered before or after the issuance of the show cause notice. Therefore, the matter was remanded to the original adjudicating authority for fresh adjudication, allowing the appellants an opportunity to present their case properly.

In conclusion, the Tribunal considered it a fit case for waiver of pre-deposit and granted a stay against the recovery of all dues. The Tribunal emphasized the importance of considering whether repair and maintenance services were undertaken as a result of an agreement or contract to determine service tax liability accurately. The decision highlighted the need for a thorough examination of legal provisions and proper consideration of all relevant factors before imposing service tax on repair services without a specific agreement or contract.