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2012 (6) TMI 579 - AT - Service TaxWaiver of pre-deposit - services of maintenance and repair Held that - no maintenance contract between the appellant and their client and services have been provided under the rate contract. As and when their client required the services of the appellants, they entrust the work to them at the rates agreed by them in the contract. Decided in favor of assessee.
Issues:
Prayer to dispense with the condition of pre-deposit of Service Tax confirmed against the appellant for the period 1.7.2003 to 30.11.2004. Analysis: The judgment revolves around the application seeking to waive the pre-deposit condition of Service Tax amounting to Rs.21,95,856 confirmed against the appellant for providing maintenance and repair services to clients from 1.7.2003 to 30.11.2004. The initial show cause notice was confirmed by the adjudicating authority but overturned by the Commissioner (Appeals) citing the absence of a maintenance contract between the appellant and their client, indicating services were provided under a rate contract. The Revenue appealed this decision, leading to a remand by the Tribunal to the Commissioner (Appeals) who upheld the lower authorities' decision in de novo proceedings. Upon review, it was established that the services provided by the appellants to their clients were under a rate contract where work was entrusted at agreed rates when required. Notably, prior to 16.6.2005, services rendered under a rate contract were not considered maintenance or repair services without a maintenance contract. However, a subsequent amendment expanded the definition effective from 16.6.2005 to include rate contract services under maintenance and repair. The judgment referenced precedents like Raj Trans Stampings (P) Ltd. v. CCE and a relevant Board's Circular to support this interpretation. Given the favorable stance towards the appellants on the issue, the Tribunal decided to dispense with the pre-deposit condition of the entire duty and penalty amount, unconditionally granting the stay petition.
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