2013 (11) TMI 502 - AT - Service Tax

Demand of service tax - Job work versus repair and maintenance service - Appellant contends exemption under notification 8/05-ST or 12/2003 for supply of goods - Held that - The appellant has not given proper defence with supporting documents before lower authorities. So we consider it proper to direct the Applicant to make a pre-deposit of Rs.8,00,000 within a period of 8 weeks. If appellant is able to produce verification report from lower authorities that the payment by challan dated 02-09-2010 for Rs.3,39,306 is towards amount confirmed under this order the pre-deposit amount will get reduced to that extent - Decided against assessee.

Summary

Issues:
Dispute over service tax liability for the period Oct 04 to Sept 08; Non-inclusion of parts and consumables in maintenance and repair services; Non-payment of service tax on job work charges; Short-payment of service tax on GTA service received.

Analysis:
The Applicant, engaged in manufacturing LPG cylinders and providing maintenance services, faced a dispute with Revenue regarding service tax liability for a specific period. The demand for tax, interest, and penalties amounting to Rs.29,73,990/- was confirmed against the Applicant after adjudication.

The Applicant's counsel categorized the demand into four parts: non-inclusion of parts and consumables in maintenance and repair services, non-payment of service tax on job work charges, and short-payment of service tax on GTA service received.

Regarding job work charges, the Applicant claimed exemption under notification 8/05-ST, stating the service was used for manufacturing excisable goods. They produced a certificate from Grieves Cotton Ltd, indicating payment of excise duty on goods manufactured using the service, supporting their contention.

The Applicant also sought exemption under notification 12/03-ST for parts sold during maintenance and repair services. They claimed to have paid Rs.3,39,306/- out of the total demand but failed to provide evidence for verification during adjudication.

The Revenue argued that the certificate from Grieves Cotton Ltd only covered a portion of the service tax demand, not the entire amount claimed by the Applicant. They disputed the distinction between consumables and parts, stating all materials were consumables and not eligible for exemption under notification 12/03-ST.

After considering both sides, the Tribunal directed the Applicant to make a pre-deposit of Rs.8,00,000/- within 8 weeks due to insufficient supporting documents provided earlier. The pre-deposit amount could be reduced if the Applicant verified that the payment of Rs.3,39,306/- was related to the confirmed demand.

The Revenue was instructed to verify the purpose of the payment made by the Applicant to facilitate resolution in case of a dispute during compliance. The compliance of the order was to be reported by a specified date.

In conclusion, the judgment addressed the various contentions raised by the Applicant and the Revenue, emphasizing the importance of proper documentation and verification in tax disputes.