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2019 (1) TMI 1036 - AT - Service TaxClassification of activity - manufacture or service? - process of retreading - levy of service tax - penalty - Held that:- The process of retreading done by the respondent is not manufacturing process as no new product emerges but it is a process in which the pre-cured tread rubber/tread rubber is affixed on the surface of the worn-out tyres and subjecting the same to a process of curing in tyre mould using steam and this activity fall under the category of 'Maintenance, repairs and reconditioning service'. The Division Bench of this Tribunal in the case of Udaipur Tyre Retreading Co. P. Ltd. [2015 (9) TMI 1575 - CESTAT NEW DELHI] has held that the activity of retreading of tyre does not tantamount to maintenance and repair including the recondition or restoration or servicing of motor vehicles. Penalty - Held that:- Since the issue relates to interpretation and there were divergent views during the relevant period, penalties set aside by invoking section 80. Appeal allowed in part.
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