2010 (4) TMI 537 - AT - Service Tax

Management, maintenance or repair service - the issue involved in this case is regarding the Service Tax liability under the category of Management, Maintenance or Repair Service . The appellant herein repairs the transformers of the State Electricity Board in the premises of the State Electricity Board. Assessee contended that while repairing transformers, it was also using material on which sales tax was paid by it and, therefore, it was not liable to pay service tax on total amount. Held that - assessee paid sales tax on material consumed while repairing transformers, benefit of deduction of such amount from value for charging service tax could not be denied to it. Thus matter remanded for deciding afresh.

Summary

Issues: Service Tax liability under "Management, Maintenance or Repair Service" category.

The Appellate Tribunal CESTAT, Bangalore, comprising M.V. Ravindran, Judicial Member, and P. Karthikeyan, Technical Member, considered a stay petition filed by the appellant seeking waiver of pre-deposit of Service Tax amounting to Rs. 21,87,287, along with interest and penalties. After hearing both sides and reviewing the records, the Tribunal decided to dispose of the issue without the pre-deposit condition. The main issue revolved around the Service Tax liability concerning the repair of transformers for the State Electricity Board. The appellant argued that the authorities failed to consider that they had paid sales tax on materials used in the repair process. The Tribunal acknowledged this submission and emphasized that if the appellant had indeed paid sales tax on the materials used, they should be entitled to deduct that amount from the Service Tax liability. However, as this point was not raised strongly before the lower authorities, the Tribunal refrained from making a definitive ruling on the matter. Consequently, the Tribunal set aside the previous order and remanded the case to the original authority for a fresh consideration, emphasizing the importance of following natural justice principles and examining the factual evidence regarding the payment of sales tax on materials during transformer repairs.