2016 (3) TMI 953 - AT - Service Tax

Classification of services provided for the period prior to 01.05.2006 and during the period 2005-06 to 2009-10 - Whether services of maintenance or repair i.e. operation of cooling water system, operation of raw water plant, operation of MP boilers & operation of IG plant & compressed Air system provided by the appellant comes under Management, Maintenance or Repairs - Held that - the action of the respondent is management of immovable property and nothing has brought to our notice which indicates that the respondent were engaged for and doing Management Maintenance or Repairs services. Therefore, the services provided by the appellant do not come under Management, Maintenance or Repairs. - Decided against the revenue

Summary

Issues:
Whether the respondent provided maintenance or repair services prior to 01.05.2006 and subsequently under "Management, Maintenance or Repairs" services during 2005-06 to 2009-10.

Analysis:
The appeal was filed by the Revenue against the Order-in-Original passed by the Commissioner of Service Tax, Mumbai-II. The main issue was whether the respondent provided services falling under "Management, Maintenance or Repairs" services. The respondent had contracts with M/s ONGC for operating various systems. The Revenue argued that the services provided should be taxed under the mentioned category. However, the adjudicating authority found that the contracts did not require the respondent to provide any services related to management, maintenance, or repair to M/s ONGC. The contracts focused on the smooth operation of the plants without any breakdown, and the fees were for operation of the plant only. The personnel employed were for plant operation, not for providing services directly to M/s ONGC in terms of management, maintenance, or repair of any equipment. The contracts specified various functions related to plant operation, and the Board's circulars supported the classification of the service as "Operation of Plant." The dominant nature of the service provided was determined to be operation of the plant, falling under Business Support Service. Therefore, the service could not be classified under "Management, Maintenance or Repair Service." The appeal by the Revenue was based on the argument that the respondent was managing immovable property, but the adjudicating authority's findings were upheld as no evidence suggested the respondent was engaged in "Management Maintenance or Repairs" services.

In conclusion, the Tribunal held that the impugned order was correct and legal, without any infirmity, and rejected the appeal by the Revenue.