ZENITH ROLLERS LTD Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THIS appeal is filed by M/s. Zenith Rollers Ltd. against the Order -in -Original No. 42/COMM/Noida/2009 -10, dated 31 -3 -2010. Brief facts of the case are that appellants are engaged in re -rubberisation of old, worn out rubberised rollers of various industries. The customers send them their used rollers at random and re -rubberisation comprises removing the old rubber from spindle and replacing it with the fresh rubber compound coating. Intelligence was received by officers of DGCEI that the appellants did not discharge the Service Tax liability on re -rubberisation of rollers provided by them to various customers/clients. The investigations were taken by the officers of DGCEI. During the course of investigation various records/documents maintained by the appellants were examined by the officers of DGCEI and statements of various employees/Directors of the appellants were recorded to ascertain the facts whether re -rubberisation undertaken by the appellants on behalf of their customers was classifiable under the category of 'Management, Maintenance or Repair' Services or under the category of 'Business Auxiliary Services' as defined under the Finance Act as defined as under.

(2.) THE ld. B.L. Narsimhan Advocate appearing for the appellant submits that the appellants are engaged in the process of re -rubberisation of old and used rollers sent to them by their customers. He submits that re -rubberisation is a process and processing of any goods falls under definition of Business Auxiliary Service and the appellants are paying Service Tax on this activity under the Business Auxiliary Service and are availing exemption under Notification No. 14/2005 in respect of rollers sent to printing, textile industries. He further submits that activity of re -rubberisation of old roller is treated as work contract by the U.P. Government and they are paying Sales Tax on the gross value of rubber compound utilised in re -rubberisation and therefore activity of re -rubberisation undertaken by the appellants cannot be held to be the covered under Management, Maintenance or Repair Service. He further points out that entire demand of Service Tax has been confirmed in the order on gross value of re -rubberisation which includes the value on which the state of U.P. had collected the Sales Tax. He further points that they are also liable for benefit of exemption Notification 12/2003 on that part of the value on which the Sales Tax has been paid. He further submits they have taken registration under the Business Auxiliary Service right from 30 -10 -2004 and the Department has recognised their activity under the Business Auxiliary Service and Department cannot claim that facts have been suppressed by them from the Department and consequently the extended period is not invokable in their case as there is no suppression of fact and accordingly they are not liable to any penalty also.

(3.) WE find that appellants are receiving worn out rubber rollers from various customers. On receipt of these worn out rollers, they undertake following activity.