Service Tax: Management, Maintenance or Repair Services: Demand: Waiver of pre-deposit: Re-treading of the old tyres may get covered under the category of ‘Management Maintenance or Repair Services’ from 16.6.2005 and the appellant may be eligible for the benefit of abatement given under Notification No. 12/2003-S.T. The appellant has not made out a case for complete waiver of the demands made by the lower authorities. Subject to payment of stipulated deposit, the condition for pre-deposit of the balance amount involved is waived and recovery thereof stayed till the disposal of the appeal.(Para 5)

Repair & Maintenance: Demand: No evidence that appellants were authorized service provider of any manufacturer: Demand cannot be made on presumptions.

Service Tax: Maintenance or Repair Services of the software: Demand: Taxability: It is established that during the period from 09.07.2004 to 16.05.2008, Information Technology Software Services were not covered under Maintenance or Repair Service. He produces a copy of the said Final Order.(Para 4).The application for waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of the appeal.(Para 6). 

Service Tax: Maintenance and repairs service: Demand: Bonafide belief: The introduction of service tax law on maintenance or repairs was in initial stage during the relevant period and the perusal of rate of contract entered by the appellant would indicate that the amount paid for job done and hence can be considered as a rate contract, there could be a legitimate understanding of the appellant that they are not liable to discharge service tax liability under the maintenance or repair services. In view of this, the demand which is confirmed by the adjudicating authority by upholding invokations of larger period is not on sound reasoning and is liable to be set aside(Para 10). The appellant were not charging service tax on the invoices raised by them to KTPS and hence the amount collected by them needs to be considered as cum-duty amount. Matter remitted back to the adjudicating authority.(Para 11). There could be a legitimate belief of the appellant that they are not liable to discharge the service tax liability as per the agreement entered by them due to which the appellant may not have discharged service tax liability under section 73(1) of Finance Act, 1994. Therefore, invoking the provisions of section 80, the various penalties imposed on the appellants are set aside.(Para 12). 

Service Tax: Management, Maintenance or Repair Services: Demand: It stands clarified by the Board 'Circular vide F. No. F/332/16/2008-TRU dated 03.6.2008, that maintenance or repair of roads are leviable to service tax under the management, maintenance or repair services. Further, the said issue stands clarified by the Board vide their subsequent Circular No. 110/4/2009-ST dated 23.2.2009, clarifying that while construction of roads is under taxable services, management, maintenance or repair of roads are in the nature of taxable services attracting service tax. As such, there are no merits in the appellant's contention.(Para 4). Ordered to make partial pre-deposit and on compliance, the pre-deposit of balance amount of duty and entire amount of penalties imposed under various sections of the Finance Act, 1994 shall stand waived and its recovery is stayed during the pendency of appeal.(Para 6).

Service Tax: Manpower Recruitment or Supply Agency: Penalty: It cannot be held that the assessee could manage the affairs of her business during the material period but could not pay the tax due owing to the mental strain and pressure suffered by her during the same period. This penalty is reduced to an amount equal to the tax demanded. The appeal is disposed in the above terms. (para 4)

Transportation of Goods by pipeline: Dry fly ash transported through pipeline to manage the disposal of fly ash, essence of contract being “Maintenance & Repair” not a service of transportation of goods through pipeline.

Service Tax: Management, Maintenance and Repair Services: Retreading of Old Tyres: Contract or Agreement need not be in writing: The meaning of 'repair or maintenance' under section 65 (64) of Finance Act, 1994 during the material period does not necessarily require a written contract or agreement to be entered into by the parties. There was no need of any written contract or agreement to bring the appellant to the fold of law. In the absence of legislative mandate that the contract should necessary be in writing, there is no scope to grant relief for which the appeal is dismissed. (para 10.3)

Service Tax: Demand: Remand: The arguments raised by Revenue are not the basis on which the demand is confirmed. In these circumstances and in view of the contentions raised by both sides, matter needs to be reconsidered by the adjudicating authority. The impugned orders are set aside without going into the issue of limitation and a matter is remanded to the adjudicating authority for de-novo adjudication. Appeals are disposed of by way of remand.(Para 11).

Maintenance and Repair Service: Repair of shells used by sugar mills on job work basis: Taxable: Conditional stay granted.

Service Tax: Management, Maintenance or Repair Services: Pre-deposit: Prima facie case for the appellant in view of the tribunal’s decision in CMS(I) Operations & Maintenance Co. P. Ltd. case (supra) wherein the pith and substance rule was invoked to hold that the main function of the assessee was to operate the power plant and the maintenance/repair was only incidental thereto and further that such maintenance and repair of the power plant was not a service rendered to another person. This matter, is debatable, for which both sides will have to wait for final hearing of the appeal. Grant waiver of pre-deposit and stay of recovery in respect of service tax (with interest) and penalty amounts. (para 4)

Service Tax: Maintenance or repair of software: Pre-deposit: The issue regarding the maintenance and repair services i.e., SAP systems was an issue before the coordinate bench in the case of M/s. SAP India Pvt. Ltd. (supra), wherein it is held that the said services would be taxable only from 16.5.2008. In this case the appellant is using the said SAP system and the same is maintained by their parent company situated abroad. The appellant has made out a prima facie case for the waiver of the pre-deposit of the amounts involved. (para 6)

Service Tax : Maintenance and Repair Services: Demand: Retreading of tyres whether amounts to manufacture or activity under service tax: It is established that that retreading of tyres will fall under the category of "maintenance and repair services(Para 5). Rule 5 (1) of the Service Tax (Determination of Value) Rules, 2006 provide that any expenditure or cost incurred by the service provider in the course of providing taxable service, such expenditure would be treated to be included while arriving at the taxable value. Partial pre-deposit ordered and subject to compliance, application for waiver of the balance amounts involved is allowed and recovery thereof stayed till the disposal of the appeal.(Para 7). 

Service Tax : Renting of Immovable Property', and 'Management, Maintenance or Repair Services : Taxable event : Demand : Service tax liability on 'Renting of Immovable Property' was brought into service tax net in the Budget of 2007-2008 and consequent to the said Budget, clarification issued by the Central Board of Excise & Customs vide letter  D.O.F. No. 334/1/2007-TRU, dated 28.2.2007 indicates that vacant land, whether or not having facilities clearly incidental to the use of such vacant land, is excluded from the scope of this service. The appellant has rented out the vacant land adjacent to their premises for storage and warehousing in emergency situation. Prima facie, this activity may not fall under the category of 'Renting of Immovable Property'. As regards the 'Management, Maintenance or Repair Services', the agreement entered by the appellant is for the activity of operation and maintenance of mud plant wherein the appellant mixes certain materials in the mud plant. Prima face this activity of operation and maintenance of mud plant may not get covered under 'Management, Maintenance or Repair Service'. Accordingly, application for waiver of pre-deposit of the amounts involved is allowed and recovery thereof stayed till the disposal of the appeal.(Para 5).

Service Tax: Scientific & Technical Consultancy Services: Demand: Period of limitation: As to whether there is any suppression or mis-statement with intent to evade payment of duty is a question of fact and the Tribunal upon appreciation of the evidence on record has found as a matter of fact that there was no suppression or misstatement. Moreover, in the light of the fact that there was confusion prevailing in respect of the controversy in issue at the relevant time, the assessee was entitled to entertain a view that the services rendered by it did not fall within the ambit of management consultancy services. On behalf of the revenue nothing has been pointed out to the contrary to dislodge the findings recorded by the Tribunal so as to persuade the court to take another view. In the circumstances, it is not possible to state that the Tribunal has committed any legal error so as to warrant interference.(Para 8). Revenue appeal dismissed. 

Service Tax: Maintenance or repair services, under Section 65(105)(zzg) read with Section 65(64) of the Finance Act, 1994 / Information technology software service: Taxable event: Demand: It is pertinent to note that adaptation, up-gradation, enhancement, implementation, etc. of information technology software are expressly covered by the definition of 'information technology software service’ and that these very operations have also been specified as different categories on software maintenance in the literature. Thus there is almost total convergence between the technical literature on ‘software’ and the definition of ‘information technology software service’ given under Section 65(105)(zzzze) of the Finance Act, 1994.(Para 5.5). It is settled law today that a new taxable service covered by specific entry under Section 65 of the Finance Act, 1994 will not attract levy of Service Tax under any pre-existing entry.(Para 5.6). The maintenance charges collected by the appellant from their customers during the period from 09.07.2004 to 31.01.2006 are not liable to be subjected to levy of Service Tax under the head 'maintenance or repair service' under Section 65 (105) (zzg) read with Section 65 (64) of the Finance Act, 1994. The services rendered by the appellant to their customers are in the nature of information technology software service which was made taxable w.e.f. 16.05.2008 only. Such service is not to be subjected to levy of Service Tax under any other entry. Therefore, the demand of Service Tax and the connected penalties are only liable to be set aside.(Para 6). 

Service Tax : Management, Maintenace & Repair Service : Pre-deposit : The period involved in this case is 9.07.2004 to 30.04.2006 and at that time the applicant was aware of the Board’s circular dated 17.12.2003 which was not withdrawn till 9.05.2007 and in the definition of maintenance services, clause (b) ‘maintenance or repair of properties whether immovable or not ‘was substituted only with effect from 1.05.2006. However, the Board’s circular dated 17.12.2003 remainder in force till 9.05.2007. In the circumstances, the Pre-deposit of duty, interest and penalty is waived and recovery of the same is stayed during the pendency of the appeal

Service Tax: Condonation of Delay: Sickness of proprietor: Medical Certificate produced : The application for condonation of delay is allowed and the appeal is admitted. (para 2)

Service Tax: Management, Maintenance & Repair Service: Tax liability on sub-contractor: Pre-deposit: The applicant has submitted that they are sub-contractor of M/s. Xerox India who had paid the service tax in the case and which has not been contested by the department. Waiver of the pre-deposit of service tax along with interest and penalties and the recovery of the same is stayed during the pendency of the appeal. (para 3)

Service Tax: Management, maintenance & repairs services: Section 73(3): Waiver of Show cause notice: In view of the fact that before issue of show cause notice, service tax and interest was paid, the benefit of Section 73(3) of Finance Act, 1994 would be available to the appellants and therefore the show cause notice should not have been issued to the appellants. (par 4)

Service Tax: Management, maintenance & repairs services: Penalty: Section 80: In view of the observations regarding newly introduced tax and the nature of the firm, the benefit of lenient view available under Section 80 of Finance Act, 1994 can also be extended to the appellants. Under these circumstances, penalty imposed under Section 76 is also required to be set aside. However penalty under Section 77 of the Act which is for contravention of various rules and for not filing the return, has to be sustained. (para 4)

Service Tax: Management, maintenance & repairs services: Cum-Tax value: Remand: In view of the provisions of Section 67 of Finance Act, 1994, the amount received has to be treated as inclusive of tax. The matter is remanded to the original adjudicating authority for the limited purpose of calculation of the correct amount of service tax payable by treating the amount received by the appellants as inclusive of service tax. (para 4,5)

Service Tax: Maintenance or Repair services: Pre-deposit: The payments involved are reimbursement of expenditure and not consideration received by the appellants for any service.

Service Tax: Cenvat Credit: Rule 6 (3) of Cenvat Credit Rules: Pre-deposit: Appellants constructed the flats and transferred to the land owners in exchange for land received. No services are involved in this transaction; there are no exempt services. Therefore, Rule 6(3), of the Cenvat Credit Rules has been incorrectly invoked to demand Cenvat Credit availed by the appellant in excess of 20% of the aggregate input service credit. The impugned demands and penalties are not sustainable. Order complete waiver of the dues adjudged against the appellants pending decision in the appeal.

Service Tax: Management, Maintenance & Repair Services: Picking & Cleaning Services: Penalty: Section 80: Considering the fact in this case also that the appellant was not aware of the legal provisions of the service tax, who is a small tax payer, the benefit of Section 80 of the Finance Act is given to the appellant. Accordingly, the penalties against the appellant are waived. With these terms, the appeal is allowed. (para 6)

Service Tax: Maintenance and Repair Services : Retreading of tyres: Cost of Material consumed in providing the service: The adjudicating authority having accepted that the assessees were paying sales tax on the materials consumed obviated the necessity for remanding for verification as to whether sales tax liability has been discharged by the assessees. The impugned order is set aside and allow the appeal. (para 2,3)

Service Tax: Extended Period: Suppression: Pre-deposit: It is settled that a demand notice which invokes the extended period of limitation under the relevant provision of low should clearly allege the necessary facts constituting one or the other ingredient laid down in the said provision for invoking the extended period. This essential condition, it appears, has not been fulfilled in this case. Waiver of pre-deposit and stay of recovery in respect of the adjudged dues, considering the plea of limitation raised by the appellant. (para 2)

Service Tax : Management, Maintenance or Repair Service : Retreading of Tyres : Penalty : No allegation of suppression : The penalties confirmed against the appellants without any coercive finding against the appellants are not sustainable in this case. The Revenue has not discharged the burden of proof that the appellant has suppressed the facts with intent to evade payment of Service Tax. There is no allegation of suppression in the show-cause notice also. Penalty is not warranted in this case against the appellants. Accordingly, the impugned order to the extent of imposition of penalties is set aside. (para 6)

Service Tax: Maintenance & Repairs Services: Retreading of tyres: Penalty: The definition of service tax under the category of Maintenance and Repairs was extended only w.e.f. 16.6.05 onwards, thus bringing the appellant under the net of service tax. The appellant plea that they were under bonafide belief that they were exempted till 4 lakh clearance cannot be doubted. They have deposited the entire service tax with interest, in which case, extension of benefit of Section 80 of Finance Act cannot be held to be unjustified. (para 3)

Service Tax: Management, Maintenance and Repair services: Bar of Limitation: Pre-deposit : Appellant entertained a consistent view that he is providing services which falls under BAS. If that be so, the show cause notice issued on 31/03/2008 without considering the appellant’s letter dt. 25/04/2004 cannot invoke extended period, as nothing prevented Revenue from pursuing the issue further, based on letter of the assessee. Only on the point of limitation, the application for waiver of pre-deposit of amounts involved is allowed and recovery thereof stayed till the disposal of the appeal. (para 7)

Cenvat Credit: Input service: Gardening services used in or in relation to the business activity: Credit admissible: Issue well settled.

Service Tax: Maintenance and Repair Service: Retreading of Tyres: Penalty: Sub-Section (3) of Section 73 of the Act restrains the department from issuing any show-cause notice for demand of service tax from an assessee where they have already self-determined and paid up the tax under intimation to the department. This provision of law in no manner restrains the authorities from taking penal action against such an assessee for default / delay of payment of service tax. The lower authorities have, however, chosen to impose a penalty equal to service tax on the assessee and the department has no grievance in this behalf. In the result, the appeal gets dismissed. (para 3,4)

Service Tax: Penalty: Burden to establish suppression: The burden on the Revenue to establish suppression on the part of the assessee with intention to evade payment of tax has not been discharged. The penalties imposed under Sections 76 and 78 set aside, the assessee do not challenge the penalty of Rs.1,000/- imposed under Section 77 of the Act - and allow the appeal. (para 2)

Management, Maintenance or Repair Service: Immovable Property: Activities of growing of grass, plants, trees or fruits, vegetable, regular mowing of lawns, pruning & trimming of shrubs and cleaning of garden, would not come within the ambit of "maintenance of immovable property". Appeal of Revenue rejected.

Reconditioning of Old M S Rollers: Removing the remnants worn out/ damaged rubber components  from Old and used M.S.Rollers and re-rubberise them by subjecting them to vulcanization amounts to reconditioning. Activites could be considered as reconditioning and Prima facie liable to service tax under the head 'repair and maintenance service'. Predeposit ordered.

Maintenance and Repair Services: Repair work undertaken without maintenance contract was not exigible to service tax prior to 16.6.2005.

Maintenance or Repair service: Appealants not directly authorised by manufacturers of the machines, they cannot be considered to fall under the category of maintenance or repair service as it stipulates that the service shall be "provided by manufacturer or any person authorised by him". Stay Granted . Predeposit waived.

Maintenance & Repair Service: Penalty: Service tax with interest paid immediately being pointed out : Penalties set aside.

Maintenance Vs. Repair: Board’s circular dated 27-7-2005, clarifies that when only repair work was undertaken without a maintenance contract then service tax was not attracted for the period prior to 16-6-2005. Repair arises after the machine fails or gives problem. Maintenance may or may not involve repair. Maintenance is in the nature of preventive action. Department’s appeal rejected.

Repair & Maintenance: Maintenance or Repair Service means any service provided by a person under a maintenance contract or agreement or repair in respect of maintenance or repair of goods. Departmental appeal allowed.

Maintenance & Repair : Agreement regarding rate contract for repair of damaged transformer. No agreement for maintenance of transformer. Repair or servicing carried out under contract other than maintenance was not covered under the purview of service tax.

Extended period : The present demand is for the previous period when maintenance and repair services were not specifically included in the Service Tax net. Moreover, the demand notice has been issued nearly four and a half years after the relevant period, but the relevant provision providing for extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994 has not been invoked in the show cause notice. There is also no allegation of fraud, misstatement etc. in the show cause notice. As such, the finding of the Adjudicating Commissioner that he has no hesitation in holding that longer period of limitation is invocable, is an observation which goes beyond the scope of the show cause notice.

Stay : Management, Maintenance or Repair Service : For the period prior to 16.6.2005 repair or service other than maintenance contract or agreement was not covered within the purview of the service tax. Stay granted.

Stay : Management, Maintenance or Repair Service : Only re-treading the old and used tyres of their customers and there is no contract or agreement entered with between applicant and the customer. Not covered. Pre deposit waived.

Stay : Maintenance or Repair : Raw material cost was prima facie held to be not includible in the value of taxable service in view of the Tribunal’s decision in Adlabs v. Commissioner - 2006 (2) S.T.R. 121 (Tribunal).

Management, Maintenance or Repair Service: Inclusion of value of cost of certain components supplied free of cost by the appellants under AMC.

Debatable issue : Looking to the small amount of tax involved, waiver granted.

Management, Maintenance or Repair Service: The main contractor means the person who is responsible and obliged under the contract to provide the taxable service. There is no contract and sub-contract. The beneficiary of the service is someone other than the purchaser of the service is altogether irrelevant.

Maintenance: In order to levy Service Tax prior to 16-6-2005, a pure maintenance contract is a must. Demand set aside.

Service Tax: Maintenance and repair services: Scope: Appellant is a Government of India undertaking. Board's circular dated 27-7-2005 has applicability to the facts of the case. The President's Bench has already taken a prima facie view that units which are run by Government of India come under a different footing for the purpose of putting them to terms in the Stay Application, as the burden of deposit has to be shared by Government of India and the amounts are being transferred from one department to another department.(Para 4).
Pre-deposit waived.

Service Tax: Repair and maintainance service: Scope and liability: Appellants are receiving old and used cylinders and these are being filled by them with paper/cotton felt/rubber for bringing the cylinders in original workable condition so that the cylinders can be put to use in the machine. In these circumstances, there is no infirmity in the impugned order whereby it was held that process undertaken by the appellants comes under the scope of maintenance or repair service. (Para 4).
The appeal is dismissed.

Service Tax: Maintenance and repair: Scope: Agreement in question is a work contract. The contract provides rates for repair of transformers and also provides guarantee for the transformers repaired by the respondent. As per the Board Circular dated 27-7-2005, prior to 16-6-2005 repair of service carried out under the contract other than the maintenance contract or agreement was not covered within the purview of Service Tax. In absence of any maintenance contract, there is no infirmity in the impugned order.(Para 4).
Revenue appeal dismissed.

Service Tax: Management Consultant: Scope and taxability: The Commissioner shall decide the matter in the light of the submissions and grounds which have already been brought out by the appellants in the proceedings including their submissions that they were only selling software and it is only sale of goods in terms of the Apex Court judgments in the case of TATA Consultancy Services v. State of Andhra Pradesh STO 2004 SC 306 wherein it has been held that sale of software amounts to sale of goods. As the other issues have not been dealt with by the Commissioner, that should also be dealt with in the de novo proceedings.(Para 2,5).

Matter remanded for de-novo adjudivation.
 

Consultancy services including Computer Consultancy Services: Canned Software: Whether “goods”: Properties which are capable of being abstracted, consumed and used and/or transmitted, transferred, delivered, stored or possessed etc. are "goods" for the purposes of sales tax. A software programme may consist of various commands which enable the computer to perform a designated task. The copyright in that programme may remain with the originator of the programme. But the moment copies are made and marketed, it becomes goods, which are susceptible to sales tax. Even intellectual property, once it is put on to a media, whether it be in the form of books or canvas (in case of painting) or computer discs or cassettes, and marketed would become "goods”. Liable to pay sales tax.