The Allahabad bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has held that the re-rubberization of the old rollers would not amount to Business Auxiliary Service for the purpose of levying service tax.
The appellants engaged in the re-rubberisation of old, worn out rubberized rollers of various industries. The customers send them their used rollers at random and re-rubberisation comprises removing the old rubber from the spindle and replacing it with the fresh rubber compound coating. The department demanded service tax from the appellants by finding that the activity would amount to Business Auxiliary Service or Management, Maintenance or Repair Services under the Finance Act, 1994.
The Tribunal noticed the decision in the case of Zenith Rollers Ltd. V. Commissioner of Central Excise, Noida, wherein it was held that the appellants are equally classifiable under two services namely Business Auxiliary Service and Maintenance or Repair service.
“Since the service cannot be classified under clause ‘a’ and ‘b’ of Section 65A, clause ‘c’ of Section 65A is attracted according to which service is classifiable under the sub-clause of Clause (105) of Section 65 which comes first. We find that Business Auxiliary service is covered under Section 65(105)(zzb) and Management, Maintenance or Repair Service is covered under Clause 65(105)(zzr). Since Business Auxiliary Service comes first under Clause 65(105)(zzb), we hold that service is classifiable under Business Auxiliary Service. We set aside the Order-in-Original and allow the appeal,” the Tribunal said.Subscribe Taxscan AdFree to view the Judgment