Case nº Ruling No. AAR/02/ST/2009 in Application No. AAR/44/15/ST/2008 of Authority for Advance Rulings, March 31, 2009 (case Print Top Rubber Industries Vs Commissioner of Service Tax)
| Judge | For Respondents: S.K. Panda, Jt. CTR and Sumit Kumar, SDR |
| President | P.V. Reddi, C.J and A. Sinha and Chitra Saha, Member |
| Resolution Date | March 31, 2009 |
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Ruling:
A. Sinha, J., ( 1. This application has been filed by Print Top Rubbers Industries, a proprietary concern, under section 96(C) of the Finance Act, 1994 (the Act). The applicant states that it proposes to set up a joint venture company in (i) In the re-rubberising process, an invoice will be raised for full value of material used in rerubberising process and sales tax will be collected. The question of law arises as to on the re-rubberising charges to be collected any service tax is payable under section 65(64)(c) as amended to date under the head Management, Maintenance and repairs service as reconditioning of goods (ii) Whether the sale of new material used for reconditioning of used old rollers is taxable under Service tax under the head Maintenance and Repairs as Reconditioning/Restoration of Goods. In the above circumstances whether rerubberising charges received can be classified as taxable service of Repairs (iii) While calculating the value of taxable services under repairs and maintenance whether the value of material sold is outside the purview of Service Tax leviable under section 66 of the Finance Act 1994 1.1 The questions have been recast by us as follows: (1) Whether service tax is payable under section 66 read with 65(64)(c) on the re-rubberizing charges collected for reconditioning of used old rollers. (2) Whether the sale of material used for reconditioning of old rollers attracts service tax under the head taxable service of andlsquo;repairsandrsquo; or otherwise. (3) While calculating the value of taxable services under the head of repairs and maintenance, whether the value of material sold should also be taken into account for the purpose of levying service tax under section 66 of the Finance Act, 1994. 2. The applicant submits that as per the notification No.12/2003-S.T. dated 20.6.2003, the value of goods and materials sold in the course of rerubberisation shall be outside the purview of service tax. The applicant has also referred to Circular No. 59/8/2003-S.T. dated 20.6.2003 of the Central Board of Excise and Customs (CBEC). 3. The applicant has filed a copy of the Memorandum of joint venture agreement said to have been entered into on 1.7.2008. It is stated therein that the applicant has expertise in rubber rollers used for printing machines and Vagle is interested in investing foreign capital in 4. The re-rubberising process has been explained in the application as follows:- (i) Removing of the old rubber on Printing Machine Rollers completely. (ii) Binding the new rubber compound around the rubber rollers (iii) Vulcanising material used the steam of the boiler. (iv) Grinding the rollers for finishing purpose. 5. However, there is no clarity as to whether the applicant will undertake re-rubberisation on behalf of particular customers under some prior agreement with such customers, or one of its activities will be to buy old and used rubber rollers from the market, re-rubberise or... |
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