2018 (10) TMI 652 - AT - Service Tax

Maintenance or repair service - Extended period of limitation - appellant undertook job work with regard to de-shelling and re-shelling of old and worn out sugar mills rollers supplied by various sugar mills - Department issued SCN invoking extended period of limitation alleging that the activities of the appellant are covered under the category for service of maintenance or repair - Held that - An identical issue was the subject matter of the decision in the case of M/s.Jagat Machinery Pvt.Ltd. v. Commissioner 2012 (12) TMI 478 - CESTAT NEW DELHI , wherein it stands held that the activity of re-conditioning of old and worn out shells of Sugar Mills Rollers, shall be liable to service tax only with effect from 16.06.2005. The Tribunal also dealt with the issue of limitation and held that inasmuch as the appellant was reflecting everything in their returns filed with the Revenue, no malafide can be attributed to them - The activity of re-conditioning of old and worn out sugar mills rollers would not be taxable prior to 16.06.2005 Time Limitation - Held that - The entire facts were being placed by the appellant before their Jurisdictional Central Excise Authorities, in which case no malafide can be attributed to them so as to invoke the longer period of limitation. Appeal allowed - decided in favor of appellant.

Issues:
1. Appeal against order in appeal dated 24.02.2010 passed by the Commissioner(Appeals), Customs & Central Excise, Meerut.
2. Appellant engaged in the manufacture of excisable goods classifiable under Chapter 84 of the Central Excise Tariff Act, 1985.
3. Allegations of the department regarding service tax on activities related to de-shelling and re-shelling of old sugar mills rollers.
4. Show cause notice dated 6.6.07 invoking extended period of limitation.
5. Total demand of service tax amounting to ?27,67,875/-.
6. Arguments on merits and time bar raised by the Appellant.
7. Interpretation of law regarding maintenance or repair activities and applicability of service tax.
8. Reference to clarification issued by Ministry regarding service tax on re-conditioning activities.
9. Comparison with a previous decision in the case of M/s.Jagat Machinery Pvt.Ltd.
10. Decision on tax liability and limitation period based on previous case law.

Analysis:

The appeal was filed against the order in appeal dated 24.02.2010 passed by the Commissioner(Appeals), Customs & Central Excise, Meerut. The appellant, engaged in the manufacture of excisable goods, was alleged by the department to be liable for service tax on activities related to de-shelling and re-shelling of old sugar mills rollers. The department issued a show cause notice dated 6.6.07 invoking an extended period of limitation and demanding a total service tax amount of ?27,67,875. The Appellant contested the demand on merits and time bar, arguing that their activities should not be subjected to tax for the period prior to 16-06-2005. They relied on a Ministry clarification stating that maintenance or repair activities, including reconditioning, are liable to service tax only from 16-06-2005.

The Tribunal referred to a previous decision in the case of M/s.Jagat Machinery Pvt.Ltd., which held that re-conditioning of old sugar mills rollers is taxable only from 16.06.2005. The Tribunal also considered the issue of limitation and held that since the Appellant had disclosed all relevant information in their returns, the longer period of limitation could not be invoked due to the absence of any malafide intent. Based on the previous case law, the Tribunal concluded that the re-conditioning activities of the Appellant would not be taxable before 16.06.2005. Additionally, since the Appellant had been transparent in their filings with the Excise Authorities, no malafide intent could be attributed to them, leading to the appeal being allowed on merits and limitation.

In conclusion, the Tribunal set aside the impugned orders and allowed the appeal based on the interpretation of law, previous case law, and the Appellant's compliance with filing requirements under the Excise Act.

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