TMI Blog2012 (11) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... information was not voluntarily made as it was made in the face of audit objections. In the result, the invocation of extended period of limitation requires to be upheld Services provided by the appellant to authorised service stations and workshops during the period of dispute are classifiable as "maintenance or repair service" up to 30.4.2006 and "management, maintenance or repair service" from 1.5.2006 and, consequently, the appellant is liable to pay service tax on these services. But they are not liable to pay service tax on maintenance or repair of motor vehicles directly brought to them by the vehicle owners as this activity is covered by the exclusion clause incorporated in the definitions of "maintenance or repair" and "management, maintenance or repair" Demand of service tax on the services rendered by the appellant to authorised service stations and workshops in respect of IC engines and other parts of motor vehicles is upheld Demand of service tax on the services rendered by the appellant directly to the vehicle owners in respect of whole motor vehicles is set aside Appellant shall pay interest under Section 75 and under Section 78 of the Finance Act, 199 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period of dispute and also supplied copies of the balance sheets for the relevant period. Subsequently, in a letter dated 5.12.2007, the Superintendent requested the appellant to pay service tax on the income received from customers for reconditioning/repairs of vehicle engines and other parts from 2005-06 onwards. The Superintendent took the view that the activities undertaken by the appellant did not amount to repairs/reconditioning of 'motor vehicles' and that they only involved repairs/reconditioning of vehicle engines and other parts which were only 'equipments/goods' and therefore the activities were not excluded from levy of service tax under the aforesaid heads. In a reply dated 27.12.2007, the appellant contested the above view of the Superintendent and maintained that the activities undertaken by them were outside the purview of levy of service tax under Section 65(64) of the Act. They contended that the reconditioning/repairing works on vehicle engines or parts thereof or on other parts of vehicles were to be treated as repairs/maintenance of 'motor vehicles', which activity stood excluded from the levy in terms of the definition under Section 65(64). 4. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vehicle for purposes of the definition of "maintenance or repair" or "management, maintenance or repair". In this view, the learned counsel argued that the activities undertaken by the appellant were in the nature of maintenance or repair of motor vehicles and hence outside the scope of the levy. He also opined that the purpose behind the exclusion clause was to benefit the unorganized sector i.e., those who undertake maintenance or repair of motor vehicles and are not authorised service stations. It was also submitted that the appellant was neither a manufacturer of motor vehicles nor a person authorised by such manufacturer and, therefore, in any case, they could not be held to have undertaken the taxable activity of maintenance or repair of any goods or equipments either. 7. The learned counsel also referred to the specimen bills produced by the appellant and pointed out that, in all these bills, the particulars of vehicle such as model, registration number, etc., were clearly mentioned, apart from the description, of the work done on the vehicle. This, according to the learned counsel, clearly indicated that the works done by the appellant were in the nature of repairs/maint ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . An IC engine should not necessarily be treated as a part of motor vehicle as it could be used for other purposes as well. IC engine and motor vehicle were separate and distinct goods classified under the Central Excise Tariff Act and one could not be equated to the other. The learned Additional Commissioner (AR) argued, in this manner, that the definition of "maintenance or repair" and the definition of "management, maintenance or repair" should be strictly construed. He also referred to the bills produced by the appellant and pointed out that motor vehicle was not mentioned in the description column of any of these bills. What was described in each bill was the work done on engine or other part of motor vehicle, which was covered by "goods or equipment", the repair/maintenance whereof was subject to levy of service tax under Section 65(105)(zzg) read with Section 65(64) of the Finance Act, 1994. Referring to the plea of limitation, the learned Additional Commissioner (AR) submitted that, admittedly, the appellant had not disclosed the relevant facts to the department prior to the audit. They suppressed the relevant facts with intent to evade payment of service tax on the activit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tenance or repair including reconditioning or restoration or servicing of any goods or equipments" during the said period. The only question to be determined is whether such maintenance or repair of "goods or equipments" being parts of motor vehicles should be treated as maintenance or repair of motor vehicles so as to be kept out of the levy of service tax. This question, in our view, needs to be addressed with reference to the particular facts of this case. In their letter dated 27.12.2007 to the Superintendent of Central Excise, the appellant stated inter alia as follows: 7. It may be worthwhile to look at the way we are getting the business of reconditioning of motor engines. We get the reconditioning work from three sources. (a) Authorised Service Stations: The motor vehicles come to the authorised service stations, the engines are dismounted and given to us for reconditioning work. ..... (b) Customers: We get work directly from customers, that is, owners of the motor vehicles. In this case the motor vehicles come to our workshops, the engines are dismantled, work done and then fitted to the motor vehicles. In this case motor vehicles come directly for work. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, maintenance or repair" did not apply to them. In other words, insofar as the job works undertaken by the appellant on IC engines/parts (of motor vehicles) brought from authorised service stations/workshops are concerned, the appellant was providing the taxable service viz., maintenance or repair service for the period from 16.6.2005 to 30.4.2006. 13. As for the subsequent period (1.5.2006 to 30.9.2007) also, the state of affairs is the same as above insofar as the job works undertaken by them for authorised service stations/workshops are concerned and, therefore, the appellant cannot claim the benefit of the phrase "excluding motor vehicles" contained in Section 65(64)(i)(c) of the Finance Act, 1994. During this period, the said activities of the appellant could, alternatively, be brought within the scope of Section 65(64)(i)(b) of the Act inasmuch as the appellant was undertaking job works of maintenance or repair of movable properties brought from authorised service stations/workshops. In the result, for the entire period of dispute, the works of rebuilding, reconditioning, etc., done by the appellant on IC engines/parts (of motor vehicles) supplied by authorised service sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax is not sustainable as held by the apex court. These arguments have been contested. After considering the submissions, we are not impressed with the plea of bona fide belief insofar as the works done by the appellant on IC engines/parts received as such from various authorised service stations/workshops are concerned. It is a fact admitted by the appellant that the engines were dismounted and given to them for reconditioning and other works. There is neither any consistent plea nor any evidence to show that the whole motor vehicles were sent as such to the appellant's premises from the authorised service stations/workshops. Only the engines dismounted were sent to the appellant for reconditioning and other works. Therefore, there was no reason for the appellant to believe that they were required to undertake maintenance/repairs of 'motor vehicles' rather than individual goods/equipments like IC engines. The plea of bona fide belief is, therefore, unacceptable. It is also pertinent to note that, by virtue of the amendment of the definition under Section 65(64) of the Act, maintenance or repair of "properties whether immovable or not" by any person under a contract or agreeme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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