2010 (5) TMI 330 - AT - Service Tax

Management, maintenance and repair services - appellant had got service tax registration under Business Auxiliary Service(BAS) - appellant is doing re-rubberisation of the used rollers of printing industries - this activity will not fall under the category of BAS - re-rubberisation of used rollers of printing machines amounts to repair or recondition of rollers and will fall under the category of management, maintenance and repair service - registration given by the authorities is based upon the declaration made by the appellant and verification of such activity is not undertaken at that stage when the application for the registration is made - assessee claims the services will be under BAS while revenue is trying to classify the same under management, maintenance & repair service Held that - the application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till the disposal of the appeal.

Summary

Issues: Service tax liability on the appellant during a specific period, classification of services under Business Auxiliary Service (BAS) or management, maintenance, and repair service, waiver of pre-deposit of tax, interest, and penalties, limitation regarding the show-cause notice issued.

Service Tax Liability: The case involves a dispute over the service tax liability of the appellant for services provided during a particular period. The Revenue contends that the appellant rendered 'management, maintenance, and repair services,' leading to demands, penalties, and interest. The appellant, however, argues that they had service tax registration under BAS and believed their services fell under this category due to processing goods for clients. They started paying service tax liability under BAS from a specific date and had communicated their view to the authorities.

Classification of Services: The main issue revolves around the classification of the services provided by the appellant. The appellant claims their services fall under BAS, while the Revenue argues they should be classified as management, maintenance, and repair services. The dispute arises from the nature of the appellant's activities, particularly re-rubberisation of used rollers of printing industries. The Authority for Advance Rulings had previously held that such activities amount to repair or reconditioning of rollers falling under management, maintenance, and repair services.

Waiver of Pre-deposit: The appellant filed a stay petition seeking a waiver of pre-deposit of tax, interest, and penalties. The appellant's counsel argued for the stay on merits and limitation grounds. The Tribunal considered the submissions of both parties and noted the appellant's consistent view that their services were under BAS. Based on this, the Tribunal allowed the application for waiver of pre-deposit amounts involved, staying the recovery until the appeal's disposal.

Limitation and Show-Cause Notice: The issue of limitation arises concerning the show-cause notice issued to the appellant. The appellant had informed the Department in 2004 about providing BAS services and claiming exemption. Despite this communication, the show-cause notice was issued later without considering the appellant's earlier letter. The Tribunal found that the Revenue could not invoke the extended period for recovery based on the appellant's consistent view and allowed the waiver of pre-deposit on this ground.

In conclusion, the Tribunal emphasized the need for detailed examination of facts for the classification issue, deferred the decision on service classification to the final disposal stage, and granted the waiver of pre-deposit amounts based on the limitation aspect and the appellant's consistent stance on service classification under BAS.