2015 (9) TMI 308 - AT - Service Tax

Management, Maintenance or Repair Service - activity of reconditioning - Invocation of extended period of limitation - Held that - Admittedly, reconditioning and restoration was not available in the definition of Management, Maintenance or Repair Services prior to 16.05.2005 and same was specifically introduced with effect from 16.05.2005, Thereafter, this Tribunal has arrived at a decision that for the period prior to 16.05.2005 the definition of Management, Maintenance or Repair Services did not cover the reconditioning and restoration service. In this case the show cause notice has been issued by invoking extended period of limitation as the issue was before this tribunal where for the period prior to 16.05.2005 the activity of reconditioning is includable in the definition of Management, Maintenance or Repair Services in this dispute, therefore, extended period for limitation is not invokable. - activity of reconditioning by the appellant was not covered in the definition of Management, Maintenance or Repair Services for the period prior to 16.05.2005. In these terms demand of service tax is not sustainable against the appellant. Consequently, demand of interest and imposition of penalty are also not sustainable. In view of this, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Appeal against demand of service tax, interest, and penalties under Management, Maintenance or Repair Service category.

Analysis:
The appellant, engaged in manufacturing sugar mill machinery and reconditioning old sugar mill rollers, appealed against the confirmation of service tax demand, interest, and penalties. The dispute arose as the Revenue claimed the activity was taxable pre-16.05.2005, while the appellant argued reconditioning was only taxable post this date. The appellant's position was supported by a tribunal decision in a similar case. The appellant contended that the show cause notice was issued using an extended limitation period, disputing the tax liability pre-16.05.2005. The tribunal noted that pre-16.05.2005, reconditioning was not part of the service tax definition, only being included post this date. The tribunal disagreed with the Commissioner's view that the amendment aimed to prevent speculation. As reconditioning was not covered pre-16.05.2005, the tribunal held the demand, interest, and penalties were unsustainable. The tribunal also found the extended limitation period inapplicable due to the unresolved tax liability issue pre-16.05.2005. Consequently, the impugned order was set aside, allowing the appeal with any consequential relief.