2015 (12) TMI 271 - AT - Service Tax

Waiver of pre-deposit - maintenance or repair services - Held that - scope of the work is repair and overhauling of pumps only. Ongoing through the scope of the work we find that the applicant is not engaged in the activity of repair or maintenance of immovable property, therefore, the contention of the ld. Counsel for the applicant is not acceptable. We further find that the Counsel for the applicant M/s King Technical Traders, submits that the applicant have paid sale tax on some of the parts and the said amount is deducted from the service tax. - applicants have failed to make out a complete waiver of pre-deposit - Partial stay granted.

Summary

Issues:
1. Waiver of pre-deposit of service tax demand for maintenance or repair services from 2003-04 to 2006-07.
2. Interpretation of whether repair and overhauling services of pumps constitute maintenance or repair services for service tax liability.
3. Applicability of SSI exemption Notification and sales tax payment on certain parts supplied.

Analysis:
The judgment pertains to the applicants seeking waiver of pre-deposit of service tax demand confirmed against them for maintenance or repair services from 2003-04 to 2006-07. The Revenue contends that the repair or maintenance services provided by the applicants fall under the category of maintenance or repair services, making them liable to pay service tax. The applicants argue that as they repair and maintain pumps in a Thermal Power Station, which is immovable property, they were not liable to pay service tax before 16.6.2005. They also claim to have availed the benefit of SSI exemption Notification and paid sales tax on certain parts supplied. The Revenue, however, asserts that the scope of work undertaken by the applicants is limited to repair and overhauling of pumps, not involving immovable property maintenance, thereby making them liable for service tax.

Upon hearing both parties and examining the submissions, the Tribunal concurred with the Revenue's view that the work performed by the applicants primarily constituted repair and overhauling of pumps, not maintenance of immovable property. Consequently, the contention raised by the applicants regarding non-liability for service tax was not accepted. Additionally, the Tribunal noted the submission related to the payment of sales tax on specific parts by the applicants. As a result, the Tribunal found that the applicants had not established grounds for a complete waiver of pre-deposit. Therefore, the Tribunal directed the applicants to make a pre-deposit of 10% of the service tax within four weeks and report compliance by a specified date. Upon such compliance, the balance amount of service tax, interest, and penalties would be waived off during the pendency of the appeals.