2013 (9) TMI 258 - AT - Service Tax

Re-rubberising of old and used printing rollers - Business Auxiliary Service OR Management, Maintenance or Repair Service - Exemption under Notification No.14/2004-ST - Revenue was of the view that the activity fell within the ambit of the definition of management, maintenance or repair service as defined w.e.f. 16/06/2005 - Held that - The definition of management, maintenance or repair service as amended w.e.f. 16/06/2005 brought within its purview the activity of re-rubberisation of old rollers also - The rigour of the law was inescapable - The law had to be given full effect to - During the period of dispute, on the above activity, service tax was liable to be paid under the above head by the appellant - the appellant had specifically informed the Superintendent of Service Tax that they had obtained registration under BAS in respect of re-rubberisation of old rollers and that they were claiming the benefit of Notification No.14/2004-ST. The letter was received by the Superintendent as evidenced by his acknowledgment with seal. It appears, the material facts were disclosed to the Department by the appellant insofar as their activity was concerned as also insofar as their bona fide belief regarding tax liability was concerned - the appellant seems to have a case on limitation. Waiver of pre-deposit Bar of Limitation Financial Hardship - No prima facie case on merits but a strong case on the ground of limitation, we are inclined to direct predeposit of the service tax demanded for the normal period - Though there was a plea of financial hardships in the present application, it had not been substantiated - the appellant was directed to predeposit an amount of Rs.6 lakhs - upon such submission there will be waiver and stay in respect of the penalties imposed on the appellant and the balance amount of service tax and education cess and interest Conditional Stay granted.

Summary

Issues:
Waiver and stay of demand for service tax and education cess under 'management, maintenance or repair service' head; penalties imposed on the appellant; applicability of service tax on re-rubberising old printing rollers; claim of exemption under Notification No.14/2004-ST; plea of limitation; consideration of cited stay orders; predeposit requirement; financial hardships plea.

Analysis:
The appellant sought waiver and stay regarding a demand for service tax and education cess along with penalties imposed. The original authority had dropped the demand, but the appellate authority set it aside, claiming the activity of re-rubberising old printing rollers fell under 'management, maintenance or repair service.' The appellant argued they were registered under 'Business Auxiliary Service' since 2004, disclosed their activity, and communicated intention to avail exemption under Notification No.14/2004-ST, maintaining a belief of no tax liability. They also pleaded limitation based on a letter to the Superintendent of Service Tax in 2004.

Both sides referred to various stay orders, but the Tribunal found the appellant lacked a prima facie case on merits due to the amended definition of the service category. However, the appellant's limitation plea seemed valid, supported by their disclosure to the Department and lack of response. The Tribunal distinguished the cited stay orders, noting the unique circumstances of the present case and the appellant's strong limitation argument.

Considering the lack of merit but a strong limitation case, the Tribunal directed the appellant to predeposit a specific amount within six weeks, emphasizing the need for compliance. While the appellant cited financial hardships, they failed to substantiate the claim, yet the Tribunal acknowledged this plea for the sake of justice. Upon compliance, waiver and stay were granted for penalties, remaining service tax, education cess, and interest.

In conclusion, the Tribunal balanced the legal requirements with the appellant's circumstances, emphasizing compliance with the predeposit directive for the waiver and stay to take effect.