2008 (5) TMI 161 - AT - Service Tax

Services of Management, Maintenance and Repair contract as per appellant s contract, impugned services are not provided under the maintenance contract hence in view of Circular dated 27-7-2005, services carried out under a contract other than maintenance contract was not covered within the provisions of service tax - prima facie case is made out in favour of the appellant to justify full waiver

Summary

Issues:
Interpretation of the definition of taxable service 'maintenance or repair' service prior to 16-6-2005 and its implications on service tax liability.

Detailed Analysis:
The dispute in this appeal revolves around the interpretation of the taxable service known as 'maintenance or repair' service as defined before 16-6-2005. The definition at the relevant time encompassed services provided in relation to maintenance or repair, with maintenance defined as services provided under a maintenance contract or agreement. The appellant argues that for service tax liability to apply, the service must be provided under a maintenance contract or agreement. Since the repair service in question was not under any maintenance contract or agreement, the appellant contends they should not be held liable for service tax during the period under consideration.

The Revenue, represented by the learned DR, opposes this interpretation, suggesting that such a narrow reading would render the provisions unworkable. It is argued that while maintenance implies recurring service, repair is a one-time service. Therefore, if the service is to be rendered as maintenance, it should fall under a maintenance contract or agreement, while repair services should be subject to service tax.

In support of their argument, the appellant refers to a circular by the Board (CBEC) dated 27-7-2005, stating that repair services carried out under a contract other than a maintenance contract were not covered by service tax prior to 16-6-2005. Additionally, reference is made to Tribunal decisions in similar cases. The Tribunal finds merit in the appellant's argument, granting a full waiver of the service tax and staying the recovery until the appeal's disposal.

In conclusion, the Tribunal, comprising Justice S.N. Jha and Shri Rakesh Kumar, Member (T), grants a full waiver of the service tax and stays the recovery of the tax until the appeal is resolved, based on the interpretation of the definition of 'maintenance or repair' service and its implications on service tax liability prior to 16-6-2005.