2008 (12) TMI 98 - AT - Service Tax

Activity of repairing old and used tyres disputed period is 1-7-2003 to 10-10-2005 - service tax on maintenance and repair services was introduced on 1-7-2003 which was amended on 16-6-2005 - Commissioner (Appeals) in view of amended definition of term maintenance or repair service held that impugned activity was repair under a contract and it was liable for service tax only from 16-6-05 held that there is no infirmity in Commissioner s order

Summary

Issues:
- Appeal against demand of tax for a specific period
- Appeal against setting aside of demand of tax for a different period and penalties
- Interpretation of the definition of "Maintenance or Repair" service for service tax liability
- Inclusion of material cost in taxable value

Analysis:
1. Appeal against demand of tax for a specific period:
The Assessees filed appeals against the demand of tax for the period from 16-6-2005 to October 2005. The Revenue, on the other hand, filed appeals against the setting aside of the demand of tax for the period from 1-7-2003 to 15-6-2005 and the penalties imposed by the Commissioner (Appeals).

2. Interpretation of the definition of "Maintenance or Repair" service for service tax liability:
The issue revolved around the interpretation of the definition of "Maintenance or Repair" service for service tax liability. The service tax on "maintenance and repair services" was introduced on 1-7-2003 and later amended on 16-6-2005. The definition underwent changes, broadening the scope of services covered. The Tribunal analyzed the definitions before and after the amendment to determine the tax liability.

3. Inclusion of material cost in taxable value:
The Assessees argued that the material cost should not be included in the taxable value. However, the Tribunal found no merit in this argument. Referring to the provisions under section 76 of the Finance Act, 1994, the Tribunal concluded that tax should be paid on the gross amount charged by the service provider for the services provided.

4. Final Decision:
After considering the arguments and evidence presented, the Tribunal upheld the decision of the Commissioner (Appeals). The Tribunal found that the Assessees were providing "Maintenance and Repair" services from 16-6-2005, based on the evidence presented, and therefore, were liable to pay tax. Consequently, all appeals filed by both the Revenue and the Assessees were rejected, affirming the demand of tax for the specified period and penalties imposed.

This detailed analysis of the judgment highlights the key issues involved, the interpretation of relevant legal provisions, and the final decision reached by the Tribunal, providing a comprehensive understanding of the case.