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TMI Blog2019 (4) TMI 1267X X X X Extracts X X X X X X X X Extracts X X X X ..... his is in contradiction of the legal provisions as contained in Section 84 of the Finance Act - Appeal No. ST/197/2010 stands dismissed and Appeal No. ST/347/2011 stands allowed. Appeal disposed off. - Appeal No. ST/197/2010-DB, ST/347/2011-DB - Final Order No. FO/A/77029-77030/2018 - Dated:- 5-12-2018 - Mr. P.K. Choudhary, Member (Judicial) And Mr. Bijay Kumar, Member (Technical) Appeal No. Shri Arnab Chakraborty, Advocate Shri A. Roy, AR for the Revenue ORDER Per Bijay Kumar : Revenue is in appeal against the impugned order passed by the Commissioner (Appeals), Central Excise, Ranchi, wherein he has set aside the order passed by the lower adjudicating authority following the decision passed by him in Order-in-Appeal No. 20/JSR/2009 dated 30.1.2009. There is another appeal against this order in original passed by the lower adjudicating authority by the respondent assessee against the order of review passed by the Commissioner, Central Excise, Ranchi vide revision Order No. 5/ST/Commissioner/2011 dated 10.6.2011. 2. The issue involved in this case is that the manufacturer r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f tyre has rightly been categorised under maintenance and repair service up to 17.4.2006 and under management and repair service since 18.4.2006. The services rendered by the noticee were covered under clause (b) of the definition of repair and maintenance service , and therefore, the service is taxable under the provision of Service Tax Rules. The Commissioner (Appeals) in his earlier order being Appeal No. 20/JSR/209 dated 30.1.2009 in case of M/s C.I.O Tyre Vs. CCE Jamshedpur (as quoted in Order-in-Appeal No. 36/RAN/2010 dated 18.10.2010). The CCE (Appeals) has not disputed the taxability of the process of retreading of tyres under repair and maintenance service or under management, maintenance and repair service. Therefore, the taxability of tyre retreading under above category is well established. Further, regarding the value of taxable service, it was submitted by the Revenue that Notification No. 12/2003 dated 20.6.2003 exempts so much of value of all taxable service, as is equal to the value of goods and material sold by the service provider to the recipient of service, from the tax leviable thereon under Section 66 of the Act, subject to condition that there is a docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pealed against to Commissioner (Appeals) and accordingly, in view of provisions as contained in Section 84(4), the revision order is clearly contrary to the provisions of Rule 84(4) of the Act as it was dealt. 6.3 Regarding the appeal filed by the department, it was submitted by the ld. Advocate that the Commissioner (Appeals) has followed his earlier order being Order-in-Appeal No. 20/JSR/ 2009 dated 31.1.2009. He has stated that now the Hon ble Tribunal has decided the appeal in this case and the order passed by the Hon ble Tribunal has upheld the order of Commissioner (Appeals). 6.4 He further stated that at the nature of tyre retreading during period 16.6.2005 to 16.9.2006 (i.e. impugned period) were classifiable as those pertaining to repair and maintenance/management, maintenance and repair under Section 65(64) and 65 (105)(zzg) of the Finance Act, 1994 and therefore, taxable there under. The ld. Commissioner (Appeals) has set aside the order of lower adjudicating authority which sought to recovery the service tax along with penalty. It was further submitted that considering the nature of the service rendered by the appellant, it is covered more ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he issue at hand as the appellant in this case has deposited entirely the amount as per the requirement of the Act. The appellant assessee has not retained any amount of service tax collected by them. 9. The assessee after the introduction of negative list regime .has been classified impugned transaction as works contract and claiming the same in its ST-3 returns. The appellant assessee was also filing the VAT return with the concerned State Government on a regular basis showing the consumption of raw material to the extent from 60% to 70% of the total charge of tyre retreading. No facts contradictory to this were presented by the department during the investigation. The dominant intention of the parties and substance of the subject contract is therefore clearly characteristic of sale as opposed to service. In such an event there can be no possibility of such transaction as being in relation to service let alone those relation to repair and maintenance as against by the department. Evidently in making such allegation the department has omitted the application of domain nature test as proportionate by Hon ble Supreme Court in the case of BSNL Vs. Union of India 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is reflected in the sales tax returns. For the remaining 30% the appellant already paid the service tax. Similar views were expressed in notification No. 12/2003-ST dated 20.6.2003 by the Board. Similar views were expressed by the Hon ble Supreme Court in the case of Safety Retreading Co. (P) Ltd. Vs. Commissioner of C.Ex., Salem [ 2017 (48) STR 97 (SC)], where it was observed as under: 10. The exigibility of the component of the gross turnover of the assessee to service tax in respect of which the assessee had paid taxes under the local Act where under it was registered as a Works Contractor, would no longer be in doubt in view of the clear provisions of Section 67 of the Finance Act, 1994, as amended, which deals with the valuation of taxable services for charging service tax and specifically excludes the costs of parts or other material, if any, sold (deemed sale) to the customer while providing maintenance or repair service. This, in fact, is what is provided by the Notification dated 20th June, 2003 and CBEC Circular dated 7th April, 2004, extracted above, subject, however, to the condition that adequate and satisfactory proof in this regard is forthcoming fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee in the show cause notice issued to justify the stand now taken before this Court; at no point of time such a plea had been advanced. 5. By following the ratio laid down by the Hon ble Supreme Court, we find no reason to interfere with the impugned order and the same is hereby sustained. 13. In view of Supreme Court s order and binding order of this Tribunal the issue is no longer res integra and accordingly, we set aside the Revenue s appeal. 14. Regarding Appeal No. ST/197/2010 and ST/347/2011 against the order of Commissioner has clarified that the Commissioner has reviewed the order after being aware of the order of Commissioner (Appeals) which was in favour of the appellant assessee. This is in contradiction of the legal provisions as contained in Section 84 of the Finance Act which reads as under: 84. (4) No order under this section shall be passed by the Commissioner of Central Excise in respect of any issue if an appeal against such issue is pending before the Commissioner of Central Excise (Appeals). From the perusal the appeal record, it is seen that the Commissioner (Appeals) has passed the Order- ..... 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