2017 (6) TMI 56 - AT - Service Tax

Management, maintenance or repair services - painting and upkeep of old cylinders - Held that - The scope of work undertaken by them which involves painting and other incidental activities of the gas cylinders, to make them fit for again use is clearly covered by the tax entry of management, maintenance or repair services in terms of section 64(65) of FA 1994 - demand upheld - appeal dismissed - decided against appellant-assessee.

Summary

Issues:
1. Taxability of charges collected for painting and upkeep of gas cylinders under service tax category.
2. Eligibility for abatement under notification no. 12/2003-ST.
3. Imposition of penalties.
4. Interpretation of notification requirements for exemption of value of goods and material.
5. Assessment of liability for Works Contract tax.

Analysis:
1. The appellants were providing technical inspection, certification, painting, and upkeep services for gas cylinders. The Revenue contended that charges for painting and upkeep fall under management, maintenance, or repair services for tax purposes. The original order confirmed the service tax liability and imposed penalties. On appeal, the Commissioner upheld the order with modifications to the valuation of taxable services and penalty imposition.

2. The appellant argued that their services did not fit under the management, maintenance, or repair category as they only performed incidental work on old cylinders. They also claimed eligibility for abatement under notification no. 12/2003-ST. However, the Revenue asserted that the services provided by the appellant fell within the tax category mentioned. The notification requirements for exemption were also discussed, emphasizing the need for supporting evidence regarding the sale of goods.

3. The Tribunal examined the scope of work undertaken by the appellant, concluding that the activities performed on the gas cylinders fell under the management, maintenance, or repair services category. The Tribunal upheld the lower authorities' decision on the extended period and penalties, noting that the appellants were discharging service tax on the services provided.

4. The Tribunal analyzed the findings of the impugned order regarding the exemption of value of goods and material under notification no. 12/2003-ST. It was noted that the notification required specific documentation indicating the sale of goods, which was not fulfilled in this case. The consumption of paint during the provision of services was considered part of the composite service and subject to service tax.

5. The Tribunal addressed the argument regarding Works Contract tax deduction by the service receiver, emphasizing the lack of documentary proof supporting such a claim. Even if the contract fell under the Works Contract tax category, the liability to pay VAT rested with the appellant. The Tribunal found no reason to interfere with the lower authorities' decision on the demand and penalty aspects.

In conclusion, the appeals were dismissed, and the order was dictated and pronounced in open court.