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2016 (2) TMI 445 - CESTAT MUMBAI

2016 (2) TMI 445 - CESTAT MUMBAI - 2016 (42) S.T.R. 941 (Tri. - Mumbai) - Taxability of repairing activity undertaken by the appellant of transformers manufactured by other manufacturers - maintenance or repair services - Held that:- the requirement of statute prior to 15.06.2005 for taxability of the services rendered is very clear i.e. that the maintenance of repairs has to be provided by any person under "maintenance contract" or agreement. Undisputedly in the case in hand for the entire peri .....

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ran, Member (J) And C J Mathew, Member (T) For the Appellant : Ms Aparna H, Adv For the Respondent : Shri D Nagvenkar, Addl. Commr (AR) ORDER Per M V Ravindran This appeal is directed against order-in-original No. 49/09/V/2012/COMMR/KS/ST dated 9.2.2012. 2. The relevant facts that arise for consideration are appellant herein is manufacturer of transformers and discharges appropriate Central Excise duty on the same. In addition to manufacturing of transformers, appellant also undertakes maintenan .....

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a conclusion that during the period 01.07.2003 to 31.03.2006, repairing activity undertaken by the appellant of transformers manufactured by other manufacturers is liable to service tax under the category of "maintenance or repair services". Show-cause notice was issued to the appellant. Appellant contested the show-cause notice on merits as well as on limitation. The adjudicating authority after following due process of law, confirmed the demands raised with interest and also imposed .....

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State Electricity Boards. She would submit that the definition of "maintenance or repair services" underwent a change from 16.06.2005 wherein the words "maintenance contract" was removed and only a "contract" was mentioned and from that date tax liability may arise on the appellant and they have discharged the said liability; but demands raised in the show-cause notice and confirmed by the adjudicating authority has included various materials cost which was used wh .....

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ceived the transformers for repairs. It is her submission that the department was in the knowledge of the activity undertaken by them hence the service tax liability is incorrectly fastened on them. It is her submission that on merits prior to 16.06.2005 the issue is covered by the judgement of the Tribunal in the case of Basant Enterprise - 2011 (24) STR 252 (T). She would also rely upon the Board's Circular B1/6/2005-TRU dated 27.7.2005 and submit that prior to 16.6.2005 tax liability aris .....

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irs undertaken by them irrespective of there being maintenance contract or not, the activity falls under "maintenance or repair" services and is taxable. He would submit that this view has not been propagated by Revenue earlier but since we are looking at definition in the Finance Act, 1994 it may be considered. It is his submission that post 15.06.2005, there is no dispute as to the taxability of the services. He would submit that the prayer of the assessee that needs requantification .....

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en by the appellant in situation wherein they undertake repairs of electricity transformers manufactured by other manufacturers and installed by various State Electricity Boards, under repairing contracts. It is also seen that these contracts were obtained by the appellant from tender and quotation process. 6.1 There is no dispute as to the fact that the appellant is undertaking the repairs or maintenance of the transformer received by them from various Electricity Boards and industrial houses a .....

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anufacturer or any person authorized by him, in relation to,- (a) maintenance or repair including reconditioning or restoration or servicing of any goods or equipment, excluding motor vehicle; or (b) maintenance or management of immovable property. Definitions as per Section 65 of F.A., 1994: prior to 15.6.2005 "Maintenance or repair" means any service provided by - (i) any person under a maintenance contract or an agreement; or (ii) a manufacturer or any person authorized by him, in r .....

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e State Electricity Board for repairs of their transformers. The tender process through which the appellant got the contract for repairing the transformers is only a "work order" and contract for repair and it is not a "maintenance contract". We find that the learned Counsel was correct in relying upon the judgement of this Tribunal in the case of Basant Enterprises (supra). The issue and the facts of Basant Enterprise (supra) is the same and the ratio of the judgement is as .....

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be covered by the definition of 'maintenance and repair service' for the period prior to 16.6.2005, which required said activity to be carried under a maintenance contract. To the same effect is the board's circular, which undoubtedly is binding on the Revenue. We further note that the decision relied upon by the learned DR is not on the same activity and the period covered in the said decision is also not available. As such, the ratio of the same cannot be made applicable to the pre .....

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discharge the service tax liability. The submission of the learned Counsel that they had discharged the service tax liability but the tax liability in the show-cause notice needs re-quantification, as the demand is also on the materials consumed for such repairing activity. Casual perusal of the invoices produced before us indicates that the appellant has charged separately for the material consumed and for the services of repairing of the said transformers. In our considered view the payment of .....

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