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Issues involved: Determination of liability for service tax on business auxiliary services, management, maintenance or repair services, consulting engineer services, and applicability of Notification No. 12/2003.
Liability for Business Auxiliary Services (BAS): The appellant, engaged in ship manufacture and repair, faced a demand for service tax on handling charges collected under BAS. The handling charges were added due to VAT Act requirements, but the Tribunal found that the handling charges were not chargeable separately for tax as they were related to the main activity of maintenance and repair. The Tribunal also noted that the value shown in the invoice need not be equal to the cost, and intent should be considered over contractual terms. Liability for Consumables in Repair Services: Another demand was made for including the cost of paints used in ship repair. The Tribunal found that the cost of consumables, like paint, should not be included in the taxable value of services provided, citing precedents where only the service component, not material costs, is liable for tax. The Tribunal ruled in favor of the appellant on this issue. Liability for Consulting Engineer Services: A demand for consulting engineer services received by the appellant was contested, with the appellant arguing that services were received prior to the taxable period. The Tribunal found that there was no specific finding that the services were received in the taxable period, leading to a prima facie case for waiver of the tax liability. Operative Order: The Tribunal waived the pre-deposit requirement and granted a stay against recovery during the appeal process, based on the prima facie cases made by the appellant on various liability issues.
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