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2023 (12) TMI 77 - AT - Service TaxClassification of service - Management Maintenance or Repair Services or not - executed various contracts for their client M/s Tata Steels Ltd. against different work orders awarded by them for “Fabrication” & “Erection” “Cleaning” & “Up keep” and “Replacement” Work - period 2006-07 to 2010-11 whereas the Show Cause Notice was issued on 21-10-2011 - invocation of extended period of limitation - Principles of natural justice - vague SCN. The Appellant has paid service tax on the activities which did not amount to manufacture. HELD THAT:- From the impugned order, it is found that the services mentioned in the said purchase order/work order has been held to be taxable broadly under the category of “Management, Maintenance or Repair”, “Erection, Commissioning or Installation” & “Commercial or Industrial Construction”. However, the main services provided in the said purchase orders/work order are held as prima facie classifiable under the category of “Management, Maintenance or Repair” Services. Finally, it has been concluded that the Appellant is liable for payment of service tax under the category of “Management, Maintenance or Repair” Service. Thus, it Is observed that the finding in the impugned order is not very specific about the classification of the service rendered by the Appellant - it is also observed that the Show Cause Notice is very vague as there is no separate bifurcation under the three categories of service and there is no finding in the Order-in-Original as to how the value of services are taxable under the category of “Management, Maintenance or Repair Service”, Commercial or Industrial Constriction Service and “Cleaning Service”. The work of “Fabrication” undertaken by the Appellant amounts to “Manufacture” as held by the Larger Bench of the Tribunal in the case of MAHINDRA & MAHINDRA LTD. VERSUS CCE., AURANGABAD, CHANDIGARH, KANPUR & CHENNAI [2005 (11) TMI 103 - CESTAT, NEW DELHI] and hence, it cannot be made taxable under Chapter V of the Finance Act, 1994. Accordingly, we observe that the 'Repalcement' works and fabrication of immovable property work undertaken by the Appellant would not fall under the category of ' “Management, Maintenance or Repair Service'. Also, Circular No.B1/6/2005-TRU Dated 27-07-2005, clarifies that “maintenance” is to keep a machine, building etc in a good condition by periodically checking and service or repairing, while “repair” is a one time activity, “maintenance” is a continuous process of which repairing may be incidental and ancillary. In this case, the Appellant has not undertaken any periodical maintenance. They have undertaken repair works as per work orders, as one time activity, which were not liable to service tax under the category of 'Management , maintenance or repair service' during the relevant period. Thus, the demand of service tax under this category is not sustainable. The Appellant has paid service tax on the activities which did not amount to manufacture. For Example, the work of “Removal of silt from Drain & Tunnel Cleaning Work”, the work of “Cleaning, Upkeep and removal of Silt” are not related to manufacture process, accordingly, service tax has been collected and deposited by the Appellant and the subject matter is not in dispute in the instant case. Thus, out of total 16 work orders, the Appellant has rightly collected service tax against 5 work orders where service tax was liable to be paid and deposited the same with the Department - No service tax was collected on works executed against rest 11 work orders, as the same was not liable to service tax under the category of 'Management, Maintenance or repair Service' as demanded in the impugned order. The impugned order set aside - appeal allowed.
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