TMI Blog2009 (3) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... a joint venture company in India in collaboration with Vagle Imports, USA to manufacture rubber rollers, rubber moulded goods and re-rubberising old and used rubber rollers of printing machines. It is with respect to re-rubberising old and used rollers that the applicant sought ruling of the Authority on the following questions- (i) In the re-rubberising process, an invoice will be raised for full value of material used in rerubberising process 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 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the customers and sales invoice will be raised…" The above statement suggests that the old rubber roller will be received from customers, the same will be re-rubberised/reconditioned and sent back to those customers. Thus re-rubberisation activity will be undertaken on behalf of particular customer pursuant to an order or agreement. However, in the statement of facts in Annexure-I of the application, the applicant has described the activity as follows: "We will be receiving 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is paid, service tax is not payable'. We are unable to make out anything clearly from the sample invoice. The use of the expression ' Re-rubberising charges for the material used for rollers' in the invoice is confusing. Re-rubberisation charges "for the material used" in the process of re-rubberisation is a contradiction in terms. 5.5. Even though we have given opportunity of personal hearing to the applicant, the applicant or its authorized representative has not chosen to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fundamental requirement for attracting the charging Section i.e. S. 66 is the provision of service by one person to another. The essence and substance of the transaction has to be judged on the facts of each case, whenever a question arises whether the transaction is one of service or some other jural relationship. The significant requirement is providing service and it should answer the description and definition of 'taxable service' falling within the purview of clause (105) of section 65. If 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 invo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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