9911796707
TMI Blog2025 (4) TMI 960X X X X Extracts X X X X X X X X Extracts X X X X ..... 98/2012, whereby the Commissioner (Appeals) has upheld the order of the Adjudicating Authority subject to certain modification. The appellants are also in appeal against the common OIA dt.22.07.2014, vide Appeal Nos. ST/23169/2014 & ST/23175/2014, whereby the OIOs dt.21.09.2012 & 08.04.2013, demanding duty of Rs.47,02,723/- for the period 2007 to 2012 & Rs.16,39,668/- for the period 2011 to 2012 respectively, invoking extended period subject to certain re-quantification of service tax were upheld. The Adjudicating Authority has examined the leviability of service tax on the activities and services being provided by the appellant to their customers and held that the said service would be covered under the category of 'Management, Maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 w.e.f. 01.07.2003. 3. Against such order, the appellants went in appeal to the Commissioner (Appeals), who examined the scope of various categories of services including the judgment of Hon'ble Supreme Court in the case of P.C. Cheriyan Vs Barfi Devi [1979 (4) ELT J.593 (SC)], wherein, it was held that the process of repair/retreading of old tyres does not amount to manufacture. Accordingly, he held that their activity is not covered under the Central Excise Act and would therefore, squarely fall under the category of MMRS w.e.f. 16.06.2005. 4. Learned CA for the appellant is mainly contesting that their activity would be under the category of WCS as it involves both material and labour, relying on the judgment of Hon'ble Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitting that penalty is not invokable under section 76, 77 & 78 of the Act. 5. On the other hand, learned AR has mainly contested that in this case, the contract is not a composite contract as the appellants are charging separate value for both material, on which they are paying VAT, and labour, where no service tax is being discharged. There is no dispute that the activity was not amounting to manufacture during the material time in view of the judgment of Hon'ble Supreme Court. Therefore, there is a clear case for demand of duty under the category of MMRS. 6. Heard both sides and perused the records. 7. We find that the issue lies within a narrow compass. The core issue to be decided is whether the activity of the appellant is cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retreaded from them. What is on record is sample bills, wherein, it is clear that they were charging material portion and the labour portion separately from their customer. It is also an admitted fact that they were charging VAT on the material portion but not discharging any service tax on the labour portion. 10. It is an admitted fact that the appellants were a franchisee of MRF Ltd, which gave them certain technology of retreading of old tyre and also provided certain specified machinery and materials to be used for such retreading. The actual interaction was with their customers, who would get their old tyres retreaded by the appellant. Therefore, the terms and conditions of the agreement between the MRF Ltd, who gave the appellants t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry of appellant's claim for certain classification and the classification proposed by the department. Thus, in the absence of any cogent and strong evidence on record to suggest that there was any deliberate attempt and intent to evade payment of duty, invocation of extended period shall not be possible. However, where the demand has been raised within the normal period, the demand will sustain if contract is not found to be composite contract on the grounds that the proposed classification in SCN is MMRS. 12. In view of the above discussions, we remand the matter back to the Original Adjudicating Authority to go through the contract/agreement/ purchase order, etc., between the appellant and their customers, who were sending old tyres for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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