2011 (4) TMI 550 - AT - Service Tax

Demand - Maintenance and repair service - the repair in the present appeal is before 16.6.2005 and the services were being provided by the appellant under the rate contract. This fact stands admitted by the original adjudicating authority - To the same effect is the board s circular, which undoubtedly is binding on the Revenue - Appeal is allowed

Summary

Issues:
Interpretation of service tax liability for maintenance and repair services before and after a specific date.

Analysis:
The case involved the appellant, who registered with the Service Tax department for providing maintenance and repair services. The appellant did not file returns for a period, leading to a show cause notice for service tax payment. The appellant argued that service tax was only applicable when services were provided under a maintenance contract. The Assistant Commissioner agreed with the appellant for the period before a specific date but imposed service tax for a later period under a maintenance contract. The Commissioner upheld the demand, leading to the appeal.

During the hearing, it was established that the repair activity was conducted under a rate contract, not a maintenance contract. The appellant cited precedent decisions and a Board circular to support their claim that repair services under rate contracts were not subject to service tax before the specified date. The appellant referenced various Tribunal decisions to strengthen their argument.

The Departmental Representative contended that the contracts were for maintenance and repair, thus attracting service tax. They relied on a Tribunal decision involving cylinder maintenance and repair services to support their stance. However, the Tribunal found that the repair activities in the present case, conducted under a rate contract before the specified date, were not covered under the definition of maintenance and repair services.

The Tribunal concluded that the issue was settled by precedent decisions and the Board's circular, which clarified that repair services under rate contracts were not liable to service tax before the specified date. The Tribunal noted that the Departmental Representative's referenced decision did not align with the present case's facts and period. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant, granting consequential relief.