Commissioner Of Central Excise & ... vs The Shipping Corporation Of India Ltd

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. Appeal No. ST/89501/2013-Mum ST/Co-91014/2014-Mum (Arising out of Order-in-Appeal No. BPS/170/LTU/MUM dated 29/08/2013 passed by the Commissioner of Central Excise & Service Tax (Appeals), LTU, Mumbai )

For approval and signature:

Honble Mr. Anil Choudhary, Member (Judicial) Honble Mr. P.S. Pruthi, Member (Technical)

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1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : of the Order?

4. Whether Order is to be circulated to the Departmental : authorities?

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Commissioner of Central Excise & Service Tax (LTU), Mumbai : Appellant

VS

The Shipping Corporation of India Ltd. : Respondent

Appearance

Shri K. S. Mishra, Additional Commissioner A.R. for Appellant

Shri Bharat Raichandani, Advocate for respondent

CORAM:

Mr. Anil Choudhary, Member (Judicial) Mr. P.S. Pruthi, Member (Technical)

Date of hearing : 07/01/2015 Date of decision : /2015

ORDER NO.

Per : P.S. Pruthi

This appeal filed by Revenue is directed against order of Commissioner (Appeals) who set aside the order of the adjudicating authority rejecting the refund claim of Rs.16,40,79,318/- filed by the respondent M/s. Shipping Corporation of India Ltd. (SCI). Cross-objections were also filed by the Respondent.

2. The background of the case is that M/s. SCI are engaged in providing taxable services under the categories of Maintenance or Repairs and Business Auxiliary Service. They filed the refund claim on the ground that they had inadvertently paid service tax during the period from 16.6.2005 to 31.3.2006 on the entire amount paid to them by M/s. ONGC to whom they had provided services whereas the service tax was actually payable only on the commission received by them and not on the total cost reimbursed to them by M/s. ONGC. The respondent and ONGC had entered into a Master Contract on 9th June 2005 under which the respondent provided Operation and Maintenance Management of Well Stimulation Vessel owned by ONGC. The scope of the work under the Contract is given in Clause (3) of Annexure-III to the contract for the Well Stimulation Vessel Smaranidhi. Similar contracts were entered into for other vessels. The scope of work is extracted below :

3.2 The Marine operations broadly include:

3.2.1 Manoeuvering & dynamic positioning of the vessel, 3.2.2 Crane & deck operations, 3.2.3 Coordination for landing & take off for helicopter, 3.2.4 Repair & Maintenance of the Vessel including cleaning & painting, 3.2.5 Repairs & maintenance of navigational, communication, electrical, electronics & safety equipments including office, galley, house keeping & entertainment equipments.

3.3 To provide a Base Manager for co-ordination and follow up of Offshore Operations. The Base Manager shall be responsible for smooth operations as well as maintenance of the Vessel, all supplies and deployment of complete crew in all the shifts. The Base Manager shall have suitable office accommodation and all secretarial assistance required to enable him to carry out his responsibilities.

3.4 To keep the vessel in Dynamic Positioning mode during job execution.

3.5 To maintain/up-keep of the referred equipment and attend to the day-to-day repairs & maintenance of the Vessel (marine equipment, all auxiliary equipment as referred at Para 3.1 including electrical & electronic components of stimulation equipment on the vessel) and any reasonable addition of equipment/systems during the Contract. .................................. Contractor shall promptly and in professional manner carry out the necessary repairs and replacement of parts so as to make such equipment operational again.

3.6 To maintain the necessary inventories, to arrange and provide expeditiously all spares for routine and preventive maintenance, overhaul, break down etc. The Contractors responsibility shall also include to proper forecast required to keep all the equipment operational at all the times.

3.7 The supplies of material/spares/consumables including lubricants shall be against the indents / requisitions approved by Owner on the recommendation of Contractors representative duly certified by Owners representative on board, keeping in view the consumption pattern, inventory levels, PMS schedule & lead time of procurement etc. 3.7.1.Only genuine spares for equipment & machineries shall be allowed for use, which are required to be procured from the OEM/OES or his authorized dealers. Any substitution, if required, must get specific approval from the Owner with proper justification. The consumables (items/spares) already indigenised may continue to be procured from such sources.

3.7.2 .To maintain proper logbooks, store ledger, records on consumption of consumable & spares etc. for marine systems/ equipment and machineries on board vessel as per international practices. Such records shall be the property of the Owner.

3.7.3 .The responsibility of the Contractor includes Customs clearance & payment of Customs duty & supply to ONGC base.

3.8 To coordinate & arrange dry-dock & lay-up repairs. The vessel is required to undergo dry dock twice in five years to meet the statutory requirement of hull & thruster surveys.

3.9 To coordinate with Director General of Shipping/any other agencies for statutory marine requirements & movement of vessel in Indian Waters and overseas for dry-dock repairs etc. 3.10. To arrange for the annual statutory and classification surveys with DNV/IRS for certification of equipments on board including the stimulation equipment and to keep the Vessel covered under classification at all the times.

3.11. To be the Lead Managers for operating the Safety Management System on the vessel in compliance with ISM Code, a statutory requirement.

3.12. To arrange a Service Engineer, as and when authorized by the Owner for repair & maintenance of Marine Equipment & Systems.

3.12.1.The payment to Service Engineer shall be made as per agreed rates decided mutually before mobilisation. Traveling expenses shall be reimbursed as per actual. The transportation to & from Offshore, boarding & lodging at the vessel shall be provided by ONGC.

3.13. To provide assistance to deal with any emergency situations e.g. blow out, fire fighting, pollution control etc. as per the demand of the occasion.

Clause 10 of the Contract is also relevant and is extracted below:

10.0 MAINTENANCE The Contractor shall be responsible for the day to day maintenance of all plants, machinery and equipment on the vessel and to prevent any breakdown affecting operation and work assigned form time to time. In the event of a breakdown the Contractor shall promptly and in a professional manner carry out the necessary repairs and replacement of parts to make such plant, machinery and equipment operational again to the satisfaction of Owner. Breakdown/Downtime/Penalty shall be governed by Clause 25.

Clause  8 of the contract relates to remuneration and terms of payment.

8.0 REMUNERATION AND TERMS OF PAYMENT 8.1 Contractor shall prepare daily reports in triplicate of the number of categories of contractor personnel as per the approved regular crew, equipment on hire and for the quantities of consumables and spares delivered against authorization of Owners representative/Vessel in-charge and submit them for approval ................................................

Indicating approval (which shall not be unreasonably withheld) or shall state the reasons for non-approval and return two copies to the contractor within 10 days of submission. With regard to OSVs, relevant provision has been spelt out in OSVs Annexure II.

8.2 Payment of monthly advance against debit note by SCI Against disbursement:

As per clause 12 of Annexure- II (SCC).

8.3 The monthly advance paid shall include management expenses, payment of wages (both regular and callout) as applicable/allowances/repatiation/porterage/conveyance,temporary hotel accommodation/boarding allowance medical expenses, etc. for the various categories of personnel required for the manning of these vessels and also expenses for the running operations of the vessels and its routine maintenance and supply of stores including payment of statutory taxes, service tax as applicable and custom duties or any other statutory levies (excluding the Income Tax liability for all categories of personnel to be hired/employed by the Contractor for manning of the Owners vessels) which the Contractor may incur or become liable to pay. This shall also include the cost of the Base Managers including trainee Base Manager if any, to be appointed/employed by the Contractor for each vessel. The Owner shall also pay the cost of imported spares along with customs duty to Contractor in advance against submission of monthly Debit note.

8.4 The Owner shall pay to the Contractor remuneration @ 5% of the total expenses incurred or to be incurred by the Contractor under various illustrative heads mentioned in CL. 8.3 above. The remuneration charge of 5% will not be applicable on custom duties, Contractors service tax and Contractors management expenses.

3. As the respondent had paid service tax on the entire amount of charges reimbursed to them by ONGC, they filed a refund claim on the ground that service tax was payable only on the amount of 5% fees received by them and not on the amount which is only a reimbursement of the actual expenses incurred. Respondent also informed to the department that they had not received refund of service tax from ONGC and therefore, the doctrine of unjust enrichment is not applicable as the amount was shown in their balance sheet as service tax receivable. The adjudicating authority, while rejecting the refund, held that the entire expenditure incurred by the respondent i.e. service provider in the course of providing taxable services forms an integral part of the taxable value. He also rejected the contention of the respondent that the costs incurred on reimbursable basis have to be excluded, that even as per present provisions, the respondent had not fulfilled the conditions of Rule 5(2) of the Service Tax (Determination of Value) Rules, 2006 to be qualified as a pure agent of the service recipient. He also rejected the contention that the activity is covered under Ship Management service which became taxable w.e.f. 1.5.2006. According to him, the service provided by the respondent is well covered under the definition of Maintenance or Repair Service as the respondent was entrusted with services with regard to maintenance of the vessels. The Commissioner (Appeals) held that the activity under the said contract was not confined to Maintenance or Repair but was a composite service comprising Operations and Maintenance Management. Taking support of Section 65A(2) of the Finance Act, 1994, he held that the Ship Management service gives the essential character to the service rendered by the respondent. Therefore the tax paid inadvertently by the respondent under the Maintenance or Repair service for the period prior to 1.5.2006 is refundable.

4. Heard both sides.

5. The Ld. AR contended that the activities carried out by the respondent are well covered under the definition of Maintenance or Repair service under Section 65(64) of the Finance Act which, inter alia, include operation and management of the vessels. The Contract Price defined in Annexure-1 of the Contract means the actual cost incurred and remuneration payable as defined in the contract. Therefore, all expenditure or cost incurred by the service provider in the course of providing services forms an integral part of the taxable value. ONGC have not appointed the assessee to deal with any third party but to provide services to them directly and, therefore, the expenditure incurred cannot be treated as reimbursable expenditure. The Ld. A.R. relied on the judgment of M/s. Safe and Sure Marine Services Pvt. Ltd. Vs. Commissioner of Service Tax, Mumbai 2013-TIOL-1741-CESTAT-MUM. and the case of M/s. Jubilant Enpro Pvt. Ltd. vide order No. A/419-420/13/CSTB/C-I.

3. How

6. The Ld. Counsel appearing for SCI stated that the activity undertaken by the respondent can be described briefly as follows:

(a) ONGC is the owner of the vessel.

(b) ONGC has entered into an agreement with the Respondents for Operation, Management and Maintenance of the said vessel.

(c) The Respondents undertake to operate and manage the vessel by providing the technical personnel required.

(d) The Respondents further undertake to maintain and repair the vessel to keep it in sea worthy condition.

(e) ONGC is reimbursing the expenses incurred by the Respondents on actual i.e. cost to cost basis.

(f) The Respondents are earning remuneration @ 5% of the total expenses incurred/reimbursed on operation, management and maintenance of the vessel.

(g) The personnel employed by the Respondents for Operation, Management and Maintenance of the said vessel are qualified and experienced Marine, Geotechnical and Diving personnel satisfying the requirements of Indian Merchants Shipping Rules. Annexure-III (Schedule-D) of the above agreement stipulates the professional qualifications and requisite experience required by the Marine, Geotechnical, Diving Call out etc. personnel.

6.1. On taxability of the above activity he stated:

* The impugned services provided during the period (from 16.06.2005 to 31.03.2006) can be covered only under the taxable head of Ship Management service which was introduced with effect from 01.05.2006 and hence, any service rendered prior to that date is not taxable.

* Assuming but not admitting that the said services are taxable under the category of Management, Maintenance and Repair services, the component of consideration which was reimbursable would not form part of the taxable value.

* Value of goods/materials used in the course of such maintenance services do not form part of taxable value.

* Service tax paid by the respondent was not passed on to the customer i.e. M/s. ONGC and the said amount is reflected in the balance sheet as service tax receivable.

* Any expenditures/costs incurred by the Respondents are in the nature of expenses incurred in the capacity of a pure agent of the customers i.e. M/s. ONGC.

6.2. In support of his stand that the activity is covered under Ship Management Service he relied on CBEC Circular D.O.F. No. 334/4/2006-TRU dated 28.02.2006 which states that 3.16 SHIP MANAGEMENT SERVICE: Owners or operators of ships enter into an agreement with ship managers for provision of a wide range of services in respect of running and operations of ships. Indicative list of services provided under this category are mentioned under the definition of ship management service As the department itself said that after 1.5.2006, the activity would be classifiable under Ship Management service, the same cannot be classified under Management, Maintenance or Repair service for the earlier period. He relied on Glaxo Smithkline Pharmaceuticals Ltd. Vs. CCE 2005 (188) ELT 171(T). He added that the same activity cannot be classified under two different heads for two different periods. He relied on Gujarat Chem Port Terminal Co. Ltd. Vs. CCE 2007-TIOL-1898-CESTAT-AHM. He also stated that any interpretation of law which renders a specific provision redundant or otiose or inconsistent needs to be avoided. He relied on Sultana Begum Vs. Prem Chand Jain 1997 (1) SCC 373.

6.3. On the issue of valuation of taxable service provided by the respondent, Ld. Counsel stated that it is evident from the terms of the agreement between the respondent and ONGC as well as the invoices raised by respondent on ONGC that expenses such as Launch Hire, Custom duty paid on spares, Steamer Charges, Stores & Spares, Wages and Allowance etc. have been reimbursed by ONGC and the respondents have been paying service tax on the commission at 5% received from ONGC over and above the cost reimbursed on actual basis. The respondents are only making payment to service providers on behalf of ONGC who is reimbursing the expenses on a cost to cost basis. In this connection he referred to Clause 3.7 of the Contract which recognizes the fact that respondent shall procure materials spares etc. on behalf of the customer. He relied on CBEC Circular No. 5/97-ST dt.12.06.1997 and Circular No. 7/97-ST dated 4.7.1997 which clarify that service tax will be payable on agency commission earned by the Custom House Agent and commission earned by Manpower Recruitment or Supply Agency, respectively, and the reimbursable expenditure on behalf of the clients is not to be included in the value of taxable services rendered. He emphasized that even the Maintenance and Repair activity which is covered under the Maintenance service has been provided by the said contractors and not the respondent. He relied on Glaxo Smithkline Pharmaceuticals Ltd. Vs. CCE 1996 (3) STR 711 and Scott Wilson Kirkpatrick (I) Pvt. Ltd. Vs. CST 2007 (5) STR 118. Lastly, he urged that although valuation Rules were introduced w.e.f.18.4.2006, even by application of Rule 5 (1) they would be entitled to benefit of pure agent under Rule 5(2) of the Valuation Rules, because they recovered the expenses from ONGC on a cost to cost basis. He added that Rule 5(1) has already been stuck down as ultravires by the Honble Delhi High Court in the case of Intercontinental Consultants and Technocrats Pvt. Ltd. 2013 (29) STR 9 (Del.).

7. We have considered the rival contentions. The first issue to be decided in this case is whether the activity undertaken by the respondent i.e SCI, for ONGC, is a service covered under Section 65(64) as Management, Maintenance or Repair Service or under Section 65(96a) as Ship Management Service. It would be useful to extract the definitions of the two competing services as under :

(64) management, maintenance or repair means any service provided by-

(i) any person under a contract or an agreement; or

(ii) a manufacturer or any person authorized by him, in relation to,-

(a) management of properties, whether immovable or not;

(b) maintenance or repair of properties, whether immovable or not;

(c) Maintenance or repair including reconditioning on restoration, or servicing of any goods, excluding a motor vehicle;

(65) (96a) Ship management service includes 

(i) the supervision of the maintenance, survey and repair of the ship;

(ii) engagement or providing of crews;

(iii) receiving the hire or freight charges on behalf of the owner;

(iv) arrangements for loading or unloading ;

(v) providing for victualling or sorting or ship;

(vi) negotiating contracts for bunker fuel and lubricating oil;

(vii) payment, on behalf of the owner, of expenses incurred in providing services or in relation to management of ship;

(viii) the entry of the ship in a protection or indemnity association;

(ix) dealing with insurance, salvage and other claims; and

(x) arranging of insurance in relation to ship.

8. The exact nature and scope of service provided by SCI has already been detailed in para 2 above. There appears to be no doubt that after the introduction of the Ship Management Service w.e.f. 1.5.2006, the activity as a whole is most aptly covered under this service. However, the period in dispute in the present case is 16.6.2005 to 31.3.2006. Therefore the issue which requires a decision is whether the activity undertaken by the ONGC would be covered under the Management, Maintenance or Repair Service. It is significant to note that the word Management in the above category of service was also introduced w.e.f. on 1.5.2006. Prior to this date, the service was categorized as Maintenance or Repair service. Thus, we have to examine whether the activities would be covered by the definition of Maintenance or Repair service prior to 1.5.2006 when it was defined as :

(64) maintenance or repair means any service provided by-

(i) any person under a contract or an agreement; or

(ii) a manufacturer or any person authorized by him, in relation to,-

(a) maintenance or repair including reconditioning or restoration, or servicing of any goods or equipment, excluding motor vehicle; or

(b) maintenance or management of immovable property;

From the above, it is seen that only management of immovable property was covered under the definition of Maintenance or Repair. In other words, we have to see whether in the absence of maintenance of moveable property in the definition, the service provided by the respondent would get covered under Maintenance or Repair. To determine this we may look at the details of the scope of work which are reproduced in para -2 above. We find that in many clauses such as clause 3.2.4, 3.2.5, 3.3, 3.5, 3.6, 3.7.2, 3.12, either the words Maintenance or the word Repair is used in these clauses. Therefore, it cannot be said that service under the category of Maintenance or Repair was not provided. The problem which arises is that certain activities such as those in clauses 3.2.1(Manoeuvering & dynamic positioning of the vessel), 3.2.2 (Crane & deck operations) and activities in Clauses 3.2.3, 3.7.3, 3.8, 3.9, 3.11 and 3.12 do not appear to be covered by the term Maintenance or Repair. Such activities relate to the operation of the vessel and would not get covered by the term Maintenance or Repair. The Master Contract at the outset itself, in clause 1.3, states that Whereas the Owner have entrusted Operations and Maintenance Management (O & M) contracts of its vessels as per Annexure-II to the Contractor under Cost plus basis. Thus from the terms of the Contract as specified in Clause 1.3 and the details of the scope of work as specified in Clause 3 to Annexure-III of the Contract, it is clear that some activities related to Operations which were not taxable, during the impugned period and some activities related to Maintenance Management which were taxable under the category of Maintenance or Repair service. We also note that the word Management was also introduced in the category of Maintenance or Repair service from 1.5.2006. Therefore, we cannot agree with the reliance placed by the Ld. Counsel on the case of Glaxo Smithkline Pharmaceuticals Ltd. (supra) and the case of Sultana Begum (supra) as well as Gujarat Chem Port Terminals (supra), for the reason that the coverage of services have to be considered in the light of actual elaborate scope of work carried out by the service provider.

8.1. As we have analyzed above, the entire scope of work deserves to be split up into two categories namely Maintenance or Repair service which was taxable during the impugned period and Operations which was not taxable during the impugned period. We note that, prima facie, there appears to be a composite contract between ONGC and the respondent. However, on venturing into details of the contract we find that it is composed of a range of distinct and separately identifiable activities which are paid for and reimbursed by ONGC, activity-wise. Therefore as the value of each activity undertaken is based on the actual value for which invoices are raised by various Sub-Contractors on SCI, there should have been no difficulty in determining the value corresponding to each of the Maintenance or Repair activities provided by the respondent i.e. SCI. The Service Tax law does not bar the splitting of a contract into distinct activities each of which has a separate value.

We have seen the decisions of the Tribunal in the case of Jubilant Enpro Pvt. Ltd. (supra) and M/s. Safe & Sure Marine Services Pvt. Ltd. (supra). The facts in those cases are somewhat different. In those cases the issue was whether the appellant have provided Manpower Supply Service or Ship Management Service. In the present case at hand we have already examined the issue of classification and have come to the conclusion that only some activities provided under the contract fall in the ambit of Maintenance or Repair service. Therefore, we find it appropriate to remand the matter to the Commissioner to identify the activities in the contract which get covered by the Maintenance or Repair service.

9. The next question to be answered is whether for repair and maintenance activities, the appellant is liable to pay service tax on the entire value of the services provided as reimbursable expenditure. We have seen the details of activities performed which have been outsourced by the appellant to various agencies. We have seen the bills relating to such work such as electric work, servicing and repairs to navigational and communication equipments, repairing of rafts, specialized workshop etc. The appellant apparently are merely a conduit for getting the work done and passing on the reimbursement of expenses incurred by ONGC to the agencies to whom the work is outsourced. The Board circular relating to reimbursement of expenses incurred by CHAs and Manpower Recruitment agencies will apply, by analogy, to the present case. We have also seen material invoices raised by agencies from whom the material was procured. There have to be sound reasons to deny the benefit of notification 12/2003 which allows deduction of value of material component from the gross value of service provided.

10. We note that the Master Contract which fixes the contours of work Clause 1.3 reproduced above, states that the Maintenance of the vessels has been entrusted by the owner i.e. M/s. ONGC to the Contractor (SCI) under cost plus basis. There is no doubt that all the expenses incurred are reimbursed by ONGC for provision of service on account of expenses payable to all the Sub-contractors through whom the respondent gets the various activities performed. The respondent raises the Debit Notes on ONGC for the reimbursement of various expenses such as  Launch Hire, Customs duty on spares, Steamer charges, Stores and spares, Wages and allowances etc. ONGC reimburses the entire expenditure to the respondent on cost to cost basis. There being no factual dispute on this reimbursement, a view can be taken that the service is actually provided by the various Sub-contractors. And for the over all management of the entire work, the respondent are paid 5% commission of the total expenses incurred on the entire activity under the Contract and on this commission of 5%, they have paid service tax. We also note that Clauses 3.12 and 3.12.1 of Annexure III to the Contract specifically provide for payment to the Service Engineer arranged by the respondent but authorized by the owner, to be made at agreed rates and for whom traveling expenses are reimbursed as per actual.

This clause indicates that all expenditure incurred by the respondent for undertaking various activities are strictly on a reimbursement basis. Neither the adjudicating authority nor the Commissioner (Appeals) have gone into the details of various clauses of the Contract before arriving at a judicious decision. As regards the supply of materials and spares, here again we find from Clauses 3.7 and 3.7.1 that the materials are approved by the owner. This again indicates that all materials are being purchased on behalf of the owner i.e. ONGC. Only the billing by the suppliers is in the name of the respondent who are then reimbursed the amount entirely. The Remuneration in terms of Clause 8 of the Contract clearly specifies that all expenses are paid in advance by ONGC for various categories of personal required for manning the vessels and also expenses for the running operations as well as supply of stores including payment of service tax as applicable and Customs duty which the Contractor may incur or become liable to pay. We find this is sufficient evidence to establish that the entire expenses are indeed paid by ONGC.

From the entire arrangement it appears that no service is being provided by the respondent as such when the entire expenses are reimbursed by ONGC. We note that in the case of Jubilant Enpro Pvt. Ltd. (supra) while relying on the judgment of the Honble High Court of GDA Security Pvt. Ltd. [2006 (2) STR 542], the Tribunal held that service tax will be leviable on the gross amount including the salary of the seafarers. In the present case, we find the facts to be at variance with the above judgment of the Tribunal. From various clauses of the Contract it has been shown that the expenses are clearly reimbursable. Moreover the amounts are paid by ONGC in advance for all the expenses. Only adjustment in the actual amounts involved are claimed through debit notes.

10.1. This being the factual situation, we have to examine the issue keeping in view the statutory provisions. The valuation of taxable services for charging service tax is specified in Section 67 as the value of any taxable services shall be the gross amount charged by the service provider for such services provided or to be provided by him. Further, the Explanation to Section 67 states in the exclusion provision, that the cost of parts or other material, if any, sold to the customer during the course of providing maintenance or repair service is excluded from the value of Taxable service. As per this explanation, the cost of parts or material sold to the Customer is excluded from the Taxable Service. But the respondent has not sold any parts or material to the Service recipient during the course of providing maintenance or repair service. The lower authorities have held that ONGC has not appointed the respondents to deal with any third party but to provide services to them directly. We have noted above that the spares etc. are bought with the approval of ONGC and monthly advance is paid for reimbursement by ONGC. In the circumstances, the matter needs a comprehensive examination keeping in view Board Circulars (supra) on the issue of service tax payable on agency commission earned by Custom House Agents, and commission earned by Manpower Recruitment or Supply Agency.

11. In view of the above, we remand the case to the Commissioner for fresh adjudication with the following directions:

(i) Only some of the activities covered under the Contract between the respondent and M/s. ONGC fall in the ambit of Maintenance or Repair service. Other activities such as those related to Operations do not get covered under the category of Maintenance or Repair service. Commissioner may examine each activity and decide the classification accordingly.

(ii) The value of taxable services may be determined keeping in view our observations above, Board Circulars and judicial pronouncements on this issue.

12. Appeal is disposed in above terms. Cross-objection is also disposed.

(Pronounced in court on /03/2015)

(Anil Choudhary) Member (Judicial)

(P. S. Pruthi) Member (Technical)

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