Pre-10.09.2004 service tax scope excluded services rendered on behalf of a client, setting aside the demand.

Maintenance and repair-related services rendered under a service agreement were not taxable for the disputed period, as the record showed the client billed its customers directly and had already discharged service tax on the repairs attended to by the appellant. The pre-10.09.2004 definition of business auxiliary service did not cover provision of service on behalf of the client; that taxable limb was inserted only later by amendment. The demand for the period before 10.09.2004 was therefore not sustainable, and the impugned demand, interest and penalty were set aside.

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Issues: Whether the appellant's activities were taxable as repair and maintenance service for the relevant period and whether, in the absence of an express taxable category prior to 10.09.2004, the services could be brought under business auxiliary service.

Analysis: The contract with the client was a service agreement under which the appellant rendered maintenance and repair-related services on behalf of the client and billed the client for the work done. The record also indicated that the client directly billed its customers and had discharged service tax on the repairs and maintenance attended to by the appellant. The existing definition of business auxiliary service, as it stood before 10.09.2004, did not include provision of service on behalf of the client. That taxable limb was introduced only later by amendment, with effect from 10.09.2004.

Conclusion: The services for the disputed period were not taxable as repair and maintenance service, and the demand for the period prior to 10.09.2004 could not be sustained. The appeal was allowed and the impugned demand, interest and penalty were set aside.

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