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2014 (5) TMI 1023 - KERALA HIGH COURTScope of the term Motor Vehicle with regard to repair and management service - whether repair of part of vehicle is amount of repair of vehicle as such - Exclusion of the maintenance and repair of motor vehicle from service tax - period up to 30.4.2006 - Extended period of limitation - appellant engaged in the business of reconditioning engines and parts thereof and repairs of other parts of vehicles of all brands - appellant contended that they were in bona fide believed that they had no tax liability in respect of the activities in question and hence did not include the relevant particulars in their returns. Held that:- The word exclusion apparently means excluding any maintenance or repair relating to a motor vehicle. A motor vehicle has several parts and if only a part of the motor vehicle requires maintenance or repair, can it be said that it is not maintenance or repair of a motor vehicle? - It is not in dispute that if the motor vehicle was brought to the service centre of the appellant and they themselves had dismounted the engine and repaired it and then refitted it to the motor vehicle, they are entitled for the exclusion. But exclusion is not given by stating that dismounting has taken place at a different place. Such a view, according to us, cannot be accepted on account of the fact that motor vehicle apparently includes all its parts as well. Without its individual parts, it does not become a motor vehicle. Such part cannot be used for any other purpose as well and it is normally fitted to the same vehicle from which it is dismounted. Therefore, if any service centre or maintenance centre or workshop does maintenance or repairs to any part of the motor vehicle, it is also entitled to get the benefit of exclusion, as provided under Section 65(64) of the Finance Act, 1994. - Decided in favor of assessee. When the Statute clearly intended to exclude motor vehicle, it is apparent that it excludes parts of motor vehicle also. If such an interpretation is not given, the very purpose of such exclusion will be rendered ineffective. - Decided in favor of assessee. Extended period of limitation - Held that:- Adjudicating authority found that the assessee has not furnished all material details in their ST-3 returns and such details came to be disclosed only as a result of audit conducted by the department. This is a finding of fact, which we do not think can be ignored and there is no material to come to a different finding. In that view of the matter, we are of the view that the department was justified in invoking the extended period of limitation. - Decided against the assessee. Levy of penalty - Held that:- if the appellant has a case that repair of engines and other parts of a motor vehicle are excluded from the liability to pay service tax, definitely the issue ought to have been decided by a proper authority. Unless such a decision is taken in accordance with the procedure prescribed, it cannot be treated that there is a deliberate attempt to evade tax. Therefore, the imposition of penalty for that reason was itself bad in law. - no penalty - Decided in favor of assessee.
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