JAIN & CO. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE Appellants were engaged in the activity of repairing damaged electric motors.

(2.) Such work was done against rates agreed for each work against rates contracts. The Appellant had no contract with any person for maintaining or repairing any goods. They were only executing specific orders received by them. The Appellants were not paying any service tax on such activity. The period involved in this dispute is Jul 03 to Dec 03. Revenue issued a Show Cause Notice dated 24 -9 -2004 demanding service tax amount of Rs. 54,544/ - for value of such services received during the said period. The adjudicating authority confirmed demand only for the value of service rendered from 1 -7 -2003 when the activity was brought under tax net. Such liability was calculated as Rs. 13,804/ -. Interest was demanded and penalties under Sections 76 and 75A were also imposed. On appeal the Commissioner (Appeal) reduced the penalty under Section 76 and Section Sec 75A. Aggrieved by the order of the Commissioner (Appeal), the appellants have filed this appeal. The contention of the Appellants is that during the relevant period only activities carried out under a contract for maintenance was covered by the taxing entry and not repair work done on rate contract basis. During the relevant time the taxable activity was defined under new entry inserted by Finance Act, 2003 in Finance Act, 1994 by Section 65(64) reading as under:

(3.) THE contention of the Appellants is that it can be seen from clause (i) that only activity done under a maintenance contract or agreement was taxable during the relevant period. The appellant had not entered into any agreement for maintenance of the motors in question. Repairing activity has been made taxable under clause (ii) and this clause was applicable only to a manufacturer of the equipment or a person authorized by the manufacturer. The appellants do not fall under this category. So there was no case for bringing them under clause (ii) either.