2024 (1) TMI 774 - AT - Service Tax

Levy of Service Tax - Management, Maintenance or Repair service - appellant have under taken the production activity in their factory for and on behalf of the M/s. Gharda Chemicals Ltd. by using their own plant - HELD THAT - In the appellant s own case for the previous period by two cited cases in Gujarat Insecticides Limited Versus Commissioner of Central Excise ST, Surat-II 2023 (3) TMI 1173 - CESTAT AHMEDABAD and Gujarat Insecticides Ltd Versus C.C.E. S.T. -Surat-II 2023 (2) TMI 781 - CESTAT AHMEDABAD , on the identical issue this Tribunal has decided that the under the same set of arrangement between the appellant and M/s. Gharda Chemicals Ltd. the demand under management, maintenance or repair service shall not be sustainable. The issue is squarely covered by the above two orders of this Tribunal, whereby, it was held that under the arrangement between the appellant and M/s. Gharda Chemicals Ltd. there is no provision of service of management, maintenance or repair service, whereas, the activity of the appellant is of production of excisable goods. Therefore, following the above decisions of this Tribunal in the present matters also the demand shall not sustain. The impugned orders are set aside - appeals are allowed.

Summary

Issues involved: Interpretation of Management, Maintenance, or Repair service under section 65(105) (zzg) of the Finance Act, 1994.

Summary:

Issue 1:
The appellant undertook production activity for another company, leading to a dispute regarding the provision of Management, Maintenance, or Repair services to the said company.

The appellant argued that previous tribunal orders had set aside similar demands, thus the issue was no longer res-integra.

The Revenue reiterated the findings of the impugned order, which confirmed the demand.

The Tribunal examined the previous orders and found that the facts and legal issues were identical, except for the period in question. It was held that the appellant's activities did not fall under Management, Maintenance, or Repair services as the main condition required the service to belong to the recipient, not the provider. The appellant was engaged in manufacturing excisable goods on behalf of the other company, which did not constitute the disputed service. The demand was deemed unsustainable based on these findings.

The Tribunal further clarified that even if the activities were considered business auxiliary services, they would be exempt under a specific notification. Additionally, the manufacturing of excisable goods was excluded from the definition of business auxiliary services, further supporting the decision to set aside the demand.

Based on the above analysis and the previous tribunal decisions, the impugned orders were set aside, and the appeals were allowed.