The Bangalore bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the activity of restoration and painting of cylinders not subject to Service Tax under the head ‘Maintenance and Repair Service’.
The appellants are engaged in the business of testing of LPG cylinders which includes activities of segregation of cylinders, statutory inspection hydro testing, pneumatic testing. The department took a view that the activity of restoration and painting of cylinders and affixing logo on cylinders carried out by the appellants are subject to service tax under the heading ‘Maintenance and Repair Service’.
The appellant contended that the work order for testing cylinders and painting or repainting the same is not a maintenance contract and therefore, the activity does not get covered under the heading ‘Maintenance and Repair Service’ during the relevant period.
The Tribunal, after considering the activity undertaken by the appellants as per the tender agreement, held that he is not covered under the said service.
“Moreover, he is not a manufacturer of cylinders or he is not any person authorized by a manufacturer. It is not understood as to how the Revenue felt that the services undertaken by the appellants are covered under ‘Maintenance or Repair Service’ during the relevant period. As submitted by the appellant, the Department of Explosives has categorically declined permission for hot repairs of LPG cylinders as he was not a manufacturer. Therefore, the appellants cannot be held to be undertaking the services chargeable under ‘Maintenance and Repair Service’ as an agent of manufacture also. It is found as per tender that the repainting, etc., undertaken by the appellants is to maintain the colour coding required for the maintenance of standards of safety as categorically brought out in para 15.0, 15.1 and 18.0 in the terms and conditions of the tender. Therefore, it appears that they are not covered by clause (ii) also,” the Tribunal said.
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