2019 (5) TMI 257 - AT - Service Tax

Classification of service - re-trading of tyres - whether classifiable under Business Auxiliary Service or Management and Maintenance, Repair Services ? - HELD THAT - Central Board of Excise and Customs vide its Circular dated 27/07/2012 has clarified that the re-trading of tyres is covered under the ambit of service Management, Maintenance and Repair Service - Since the CBEC has clarified the issue regarding classification of re-trading of old and used tyre under Management, Maintenance and Repair Services , we do not find any justification in classifying the service under Business Auxiliary Service - Appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of services under "Business Auxiliary Service" or "Management, Maintenance, and Repair Service"; Applicability of service tax; Invocation of extended period for demand; Exemption under Notification 12/2003; Contradiction with Supreme Court and Tribunal decisions.

In this judgment by the Appellate Tribunal CESTAT NEW DELHI, the appeal was filed against an Order-in-Original demanding service tax for a specific period on the appellant engaged in re-trading old and used tires. The Department alleged non-payment of appropriate service tax on job charges under "Business Auxiliary Service." The appellant contended that their activity falls under "Management, Maintenance, and Repair Service" and not "Business Auxiliary Service." They argued that a clarification by the Central Board of Excise and Customs supported their classification. The appellant also challenged the demand raised within an extended period and claimed exemption under Notification 12/2003.

The Tribunal examined whether re-trading of tires should be classified under "Business Auxiliary Service" or "Management, Maintenance, and Repair Service" as per the Finance Act, 1944. Referring to a Circular by the Central Board of Excise and Customs clarifying the classification, the Tribunal noted that the activity fell under "Management, Maintenance, and Repair Service" and was liable for service tax. The Tribunal emphasized that the Circular was issued before the impugned order, and the Commissioner (Appeal) should have considered it. Citing Supreme Court and Tribunal decisions supporting the appellant's position, the Tribunal held the impugned order unsustainable and set it aside. The appeal was allowed with any consequential benefits.

Overall, the judgment addressed the classification of services, applicability of service tax, the invocation of an extended period for demand, exemption under a specific notification, and the consistency with previous legal decisions. The Tribunal's decision was based on the interpretation of relevant laws, circulars, and precedents, ultimately ruling in favor of the appellant and providing a detailed analysis of the issues involved.