TaxTMI 
TaxTMI 
2026 (2) TMI 335
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....ner of Central Excise (Appeals), Tambaram II Division, Chennai. 2. Brief facts are that the appellants are engaged in provision of maintenance and repair service. The activity involves retreading of tyres. Based on intelligence that the appellants are not paying appropriate service tax on the activity of maintenance and repair service, the unit was visited and investigation revealed that the appellants were not registered with the Department and had also not followed the procedures as provided in the Finance Act 1994. The department was of the view that the act of Tyre Retreading and repairing appeared to be classifiable under maintenance or Repair service for the period from April 2008 to September 2011. Accordingly, a Show Cause Notice....
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.... be imposed under section 78 of the Finance Act 1994 5. It appears from the Order-in-original that the appellant had not filed their reply as noted from the order-in-original. The appellants have not placed the copy of show cause notice as part of the Tribunal's record. 6. However, the appellant had attended the personal hearing and informed that they have not collected any service tax from their customers and they were totally unaware of service tax liability on maintenance and repair service. 7. Further, the Appellant has submitted that the turnover for the disputed period was adopted as the "taxable value" by the Department in order to propose the present demand and Appellant's turnover included both the components, i.e., ma....
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....le the issue on merits, that the subcontractor would be liable to pay Service Tax even if the main contractor has discharged Service Tax liability, has been settled by the Order of the Larger Bench of this Tribunal in MELANGE DEVELOPERS (supra) We do not hence examine the other judgments cited by revenue It is also clear that prior to the issue of the Master Circular in 2007, Boards Circulars held that Service Tax was not required to be paid by certain categories of the subcontractor, provided the principal had paid the Service Tax. Hence there was some ambiguity in the understanding of law prior to 23-8-2007. Further even in the case of Sunil Hi-Tech Engineers (supra), cited by revenue there was a difference of opinion among the Members of....
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....oviso to Section 11-A. Misstatement or suppression of fact must be wilful." (emphasis added) 10. It is further submitted that they were under a bonafide belief that the activity of retreading of tyres were not liable to service tax and it is a settled legal principle that if the assessee is under a Bonafide belief that the service tax is not applicable, then the larger period of limitation cannot be invoked and the demand for the period upto March 2011 was completely barred by limitation. It was also put forth that they have paid the entire tax along with interest without going into merits of the case and so quietus should have been given invoking Section 80 of the Finance Act, 1994. 11. We find that the Adjudicating Authority had ....
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....e Appellant and the Ld. Authorized Representative Mr. N. Satyanarayana represented the Department. 14. Heard both the sides and considered the evidences as available on appeal records. 15. During the hearing, the Ld. Advocate Mr. J. Shankarraman has requested for waiver of penalty imposed under Section 78 of the Finance Act, 1994 as the tax has been paid with interest on demand. He has specifically mentioned that he is contesting only on penalty. 16. On a careful consideration we find that the issue at hand as to whether the Retreading of tyres was liable to be taxed or not was settled by the Supreme Court, much later in the case of Safety Retreading Co. (P) Ltd vs. Commr. Of C.Ex. Salem- 2017 (48) S.T.R. 97 S.C, in favour of Reven....