Re-treading of used tyres treated as manufacture, excluding the activity from service tax under maintenance or repairs classification.

Re-treading of old and used tyres was treated as manufacture because retreaded tyres can come into existence only through that process. The view that the assessee was merely providing a maintenance or repair service was rejected. On that basis, the activity was held to fall within the excise regime under Chapter Heading 4012 of the Central Excise Tariff Act, not within taxable service, and the service tax demand was found unsustainable.

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Issues: Whether the activity of re-treading of old and used tyres amounts to manufacture of re-treaded tyres under Chapter Heading 4012 of the Central Excise Tariff Act, 1985, so as to fall outside service tax under the category of Maintenance or Repairs Service.

Analysis: The activity was held to involve manufacture because re-treaded tyres can come into existence only through the process of re-treading old and used tyres. The finding that the assessee was merely rendering a service was rejected, and the activity was treated as one falling within the excise regime rather than a taxable service.

Conclusion: The activity amounted to manufacture, not a taxable service, and the service tax demand was unsustainable.

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