Tribunal rectifies error, rules on Service Tax demand, and allows appeals with relief.

The Tribunal rectified a typographical error in its order and recalled the disposal of appeals under a specific scheme. Regarding the demand for Service Tax on repair and maintenance services, the Tribunal ruled in favor of the appellant, citing legal principles from Supreme Court judgments. Additionally, the Tribunal held that Service Tax on free-issue material used in providing services was not applicable, following the Supreme Court's guidance. Consequently, the Tribunal set aside the impugned orders and allowed the appeals with consequential relief in accordance with the law.

---

---

Issues Involved:
1. Rectification of typographical error in the Tribunal's order.
2. Demand of Service Tax on repair and maintenance services.
3. Applicability of Service Tax on free-issue material used in providing the service.

Detailed Analysis:

1. Rectification of Typographical Error in the Tribunal's Order:
The appellant filed miscellaneous applications seeking rectification of a typographical error in the Tribunal's order dated 26.11.2020. The original order incorrectly indicated that the appeals were disposed of under the SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME, 2019. The appellant clarified that this was a typographical error and requested rectification. The respondent had no objection to this rectification. Upon examining the records, the Tribunal found that the typographical mistake deserved to be rectified. Consequently, the order disposing of the appeals under the SABKA VISHWAS scheme was recalled, and the appeals were restored to their original numbers.

2. Demand of Service Tax on Repair and Maintenance Services:
The appellant contended that the demand for Service Tax on repair and maintenance services rendered during the disputed period had been previously addressed by the Tribunal in their favor for an earlier period. The Tribunal had formulated the issue and analyzed the principles of law settled by the Hon'ble Supreme Court in various judgments. Specifically, the Tribunal referenced the Supreme Court's judgment in re Larsen & Toubro Ltd, which discussed the non-taxability of the 'goods' element in composite contracts liable for taxation under section 65(105)(zzzza) of the Finance Act, 1994. The judgment emphasized that the service tax could only be levied on the service element of works contracts and not on the composite value, which includes the transfer of property in goods. The Tribunal concluded that the appellant's transactions were composite in nature, and the inclusion of the 'goods' element in the value of services rendered lacked legal backing and must be set aside.

3. Applicability of Service Tax on Free-Issue Material Used in Providing the Service:
The appellant also argued that the demand relating to the applicability of Service Tax on free-issue material used in providing the service was unsustainable. The Tribunal referenced the Supreme Court's judgment in re Bhayana Builders (P) Ltd, which clarified that the value of goods/material provided by the service recipient free of charge should not be included in the 'gross amount charged' for the taxable service. The judgment emphasized that the value of free supply goods could not be added over and above the contract value to determine the value of taxable services. The Tribunal concluded that the supply of 'consumables' by the recipient does not constitute 'consideration' and should not enhance the 'gross amount charged' under section 67 of the Finance Act, 1994. Consequently, the differential tax confirmed in the impugned order could not be sustained.

Conclusion:
Following the precedent laid down by the Tribunal and the Supreme Court's judgments, the Tribunal found no merit in the impugned order. The Tribunal set aside the impugned orders and allowed the appeals with consequential relief as per law.

---