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TMI Blog2009 (3) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... and sales tax will be collected. The question of law arises as to on the re-rubberising charges to be collected any service tax is payable under section 65(64)(c) as amended to date under the head Management, Maintenance and repairs service as reconditioning of goods? (ii) Whether the sale of new material used for reconditioning of used old rollers is taxable under Service tax under the head Maintenance and Repairs as Reconditioning/Restoration of Goods. In the above circumstances whether rerubberising charges received can be classified as taxable service of Repairs? (iii) While calculating the value of taxable services under repairs and maintenance whether the value of material sold is outside the purview of Service Tax leviable under section 66 of the Finance Act 1994? 1.1 The questions have been recast by us as follows: (1) Whether service tax is payable under section 66 read with 65(64)(c) on the re-rubberizing charges collected for reconditioning of used old rollers. (2) Whether the sale of material used for reconditioning of old rollers attracts service tax under the head taxable service of 'repairs' or otherwise. (3) While calculating the value of taxable services und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceiving the old used rollers of printing machines for rerubberising from market places in India. Such used rollers are wornout and in damaged conditions. Such old rollers will be rerubberised by us. It is further stated that "the sale invoice for the above rubberized material will be raised on which sales tax will be charged on the full invoice amount for sale of material". 5.2 The Commissioner of Service Tax, Mumbai (Commissioner), who is the jurisdictional commissioner, in his comments sent to the departmental representative, a copy of which has been filed before us, has proceeded on the understanding that the applicant will be providing the service of rerubberisation to its customers under some agreement with them. We are quoting below the relevant extracts of the Commissioner's comments- "The nature of activity as mentioned in the application involves receiving used rubber rollers of printing machines, removing the old material completely, binding the rollers with new material (including rubber and chemicals) around the spindles received for rubberizing and grinding & finishing the rollers. Clearly, this activity involves reconditioning and restoration of used ro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appear. 6. We shall refer to the relevant provisions in Chapter V of Finance Act 1994 and the exemption notification. Section 66 is the charging provision which says that service tax shall be levied @ 12 per cent of the value of taxable services referred to in various sub-clauses starting from (a) to (zzzzj) of clause (105) of Section 65. The valuation of taxable services is provided for by Section 67. The expression 'taxable service' is defined in section 65(105). Sub-clause (zzzg) is the relevant with which we are concerned here. The opening clause of part of clause (105) read with sub-clause (zzzg) reads as follows: "Taxable service means any service provided or to be provided - xx xx xx xx xx xx xx xx (zzzg) to any person by any person in relation to the management, maintenance or repair". The expression 'management, maintenance or repair' is defined in section 65(64) thus: "management, maintenance, or repair" means any service provided by- (i) any person under a contract or an agreement, or (ii) a manufacturer or any person authorized by him, in relation to: (a) management of properties, whether immovable or not; (b) maintenance of repair of properties, whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant undertakes reconditioning of the old rollers of printing machine pursuant to an order placed or instructions given by a customer and collects the re-rubberising charges, the service tax liability clearly arises. In such a case, the transaction amounts to a provision of service in the nature of repairing or reconditioning. The old rollers may be supplied by the customer himself or the old rollers of the dimensions specified by the customer may be procured by the applicant from the market. That does not make material difference. 8. In the light of the above analysis, if we look at the sample invoice furnished by the applicant and ignoring the inaccurate wording in the invoice, it seems to us that the applicant is charging and the customer is paying for the service of re-rubberising the used rollers. An inference can be drawn therefrom that it is essentially a transaction of providing service on the basis of an agreement express or implied. If that be so, the applicant is liable to pay service tax for such charges. As already stated, it does not appear to be a case of outright sale and purchase of reconditioned rollers manufactured and stocked by the applicant and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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