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Classification of printing solutions to customers

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Service Tax - appellant is engaged in the activity of Maintenance and Repair of equipments supplied by them under various contracts - Whether the activity qualify as Maintenance or Repair Service - Whether the activity of providing printing solutions to the customers, including pre-printing of the bills, qualify under 'Business Support Service' or ‘Business Auxiliary Service’ or under Works Contract service - Whether the activity are classifiable under Works Contract

HELD - It is a fact that appellant is engaged in the activity of Maintenance and Repair of equipments supplied by them under various contracts. Appellant is required to replace the parts and accessories at the time of repair or maintenance and the Hon’ble Apex Court has examined the contract and held that these contracts i.e. FSMA, SSMA, AMC etc. are Works Contracts and appellant is liable to pay VAT/Sales Tax on the material portion of the said contract, as per various State VAT Act – the appellant is liable to pay service tax only on Labour Portion - the appellant is engaged in the activity of printing of bill and not ‘Billing’. Therefore, the said printing of bill is altogether a different activity from the billing and cannot be termed as ‘Billing’.

In such circumstances, the services in question do not qualify under the category ‘Business Auxiliary Service’ - As the activities undertaken by the appellant under various contracts, is in nature of Works Contract i.e. the service has been provide along with material and value of the material cannot be vivisected and therefore, prior to 01.06.2007 the appellant is not liable to pay service at all. For the period post 01.06.2007, as assessee providing services in question along with material but the same is not covered under Works Contract as per Section 65 (105) (zzzza) of the Finance Act, 1994.

Therefore, assessee is not liable to pay service tax under the category of Maintenance and Repair service / Business Support Service / Business Auxiliary Service - the appeal filed by assessee is allowed and the appeal filed by Revenue is dismissed


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