2016 (1) TMI 651 - AT - Service Tax

Classification of taxable service - Job work - activity of re-rubberisation of old, worn out rubberized rollers - Business Auxiliary Service or Management, Maintenance or Repair Services liable to pay service tax - Held that - Tribunal in the case of Zenith Rollers Ltd. Vs. CCE, Noida 2013 (12) TMI 620 - CESTAT NEW DELHI . It was observed in the said decision that the activity is equally classifiable under Business Auxiliary Service as also on Management, Maintenance or Repair Services. However inasmuch as the Business Auxiliary Service came into existence before the Management, Maintenance or Repair Service, the same has to be adopted. If that be so the same would be entitled to the benefit of exemption notification. - exempted from payment of service tax in terms of Notification No. 14/2004 - Demand set aside - Decided in favor of assessee.

Summary

Issues involved: Classification of services for tax liability, applicability of exemption notification, valuation issue in one case, remand of a specific case for further decision.

Classification of services for tax liability: The appellants were involved in re-rubberisation of old rollers, claiming it falls under Business Auxiliary Service with nil duty as per an amended Notification. The Revenue, however, classified it as Management, Maintenance, or Repair Services attracting service tax. Referring to previous Tribunal decisions, it was noted that the activity could be classified under both categories, but as Business Auxiliary Service existed before the other, it should be adopted, granting exemption under the notification. The Tribunal held in favor of the appellants, setting aside the impugned orders and allowing the appeals with relief.

Applicability of exemption notification: Relying on precedents, the Tribunal concluded that the appellants' activity fell under Business Auxiliary Service, entitling them to exemption from service tax as per Notification No. 14/2004. The orders were set aside, and appeals allowed with consequential relief to the appellants.

Valuation issue in one case: The Learned DR acknowledged that the issue was covered by Tribunal decisions, but highlighted a valuation issue in one case. However, it was agreed that if the tax liability was nil due to classification, the valuation issue would become irrelevant. The Tribunal, following previous decisions, held in favor of the appellants, leading to the setting aside of impugned orders and allowing the appeals.

Remand of a specific case for further decision: In the case of M/s. Neodam Rubber Products Pvt. Ltd., an appeal was filed against a Stay Order of Commissioner (Appeals). As the Tribunal ruled in favor of the assessee on the main issue, the impugned order was set aside, and the matter remanded to the Commissioner (Appeals) for a decision on merits in light of the classification declaration, without requiring any pre-deposits. All appeals were disposed of accordingly.