TMI Blog2014 (5) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 fou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs 67,28,530/- for the period from 16/06/2005 to 30/09/2007. It was inter alia alleged that there was deliberate suppression on the ground that the amount involved in respect of repair of motor vehicles/parts were not included in the returns and penalty was proposed. 4. After hearing the appellant, the Commissioner of Central Excise confirmed the demand and the appellant was called upon to pay service tax with interest and penalty. 5. The appellant preferred an appeal before the Customs, Excise and Service Tax Appellate Tribunal. 6. The Tribunal found that in respect of motor vehicles brought to authorised service stations or workshops by the vehicle owners for repairs/maintenance, the appellant was getting only the dismounted engines or other parts from such authorised service stations/workshops for undertaking the job works of repair/rebuilding etc. Such an activity falls within the ambit of `maintenance or repair including reconditioning or restoration or servicing of any goods or equipment' and therefore it does not amount to repair or maintenance of motor vehicle . Further, the Tribunal observed that in respect of vehicles brought to the appellant's premi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dings that interest under Section 75 of the Finance Act is payable in the present case. 9. Primarily two questions arise for consideration. One is whether maintenance or repair service of motor parts are entitled for exclusion in terms of Clause 64 of Section 65 of the Finance Act 1994 with effect from 16/06/2005 and secondly whether the department is entitled to invoke the extended period of limitation as per proviso to Section 73(1) of the Finance Act 1994 from the facts and circumstances of the case. 10. Section 65(64) of the Finance Act 1994 with effect from 16/06/2005 defines maintenance or repairs as under: Maintenance or Repairs means any service provided by: (i) any person under a contract or an agreement; or (ii) a manufacturer or any person authorised 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. 11. With effect from 01/05/2006 the definition of service of Maintenance or Repairs was further amended and the service was renamed as Management, maintenance or repair which reads as un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor vehicle are also eligible for exemption. 16. The learned senior counsel for the petitioner argued that there was dispute as to whether there is an obligation to pay service tax on account of the specific exclusion of motor vehicles from the liability to pay tax. Therefore, it is not a case where the department was entitled to invoke proviso to Section 71(3) to have the benefit of the extended period of limitation. Reference is made to the judgment in Collector of Central Excise v. Chemphar Drugs Liniments [1989 (40) E.L.T 276 (S.C)]. Specific reference is made to paragraph 8 in which the Supreme court held as under: Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, before the period of six months. 17. Another judgment relied upon is Uniworth Textiles Ltd. v. Commissioner of Central Excise, Raipur [2013 (288) E.L.T 161 (S.C)]. In the said judgment it was held that mere non-payment of duty is not equivalent to collusion or wilful misstatement or suppression of facts. In order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty, the ingredients mentioned in the Section should exist and there should be absence of reasonable cause for the said failure. It is further found that even if the ingredients stipulated in Sections 76 and 78 of the Act are established, if the assessee shows reasonable cause for such failure, then the authority has no right to impose penalty in view of Section 80 of the Act. It is argued that even assuming that there is an obligation to pay service tax, in so far as the appellant has a valid case to substantiate based on the interpretation given by the appellant, it cannot be said that the appellant had evaded the liability to pay service tax and there is no wilful inaction on the part of the appellant. Hence, even assuming for the sake of argument that service tax was liable to be paid, there is no reason to impose penalty on the appellant. 20. But, according to the department, the appellant deliberately failed to show the income derived in respect of the repairs done by him and as a result, the department was totally unaware of the work that was being carried on by the appellant. Only after inspection it was noticed that there was large scale evasion of service tax and ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... servicing of any goods or equipment. Apparently, such goods or equipment includes motor vehicles also, but, in order to give the benefit to persons involved in maintenance or repair etc. of motor vehicles, such an exclusion is granted. 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? The motor vehicle in question has to be dismounted at some place either in the workshop of the appellant or in the workshop of any other person or even at the residence of the customer in order to effect repairs. Once a part is repaired and it is thereafter fitted to the motor vehicle, it will have the character of a motor vehicle, which can be used on road. 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 differe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , requiring him to show cause why he should not pay the amount specified in the notice: Provided that where any service tax has not been levied or paid or has been short-levied or short- paid or erroneously refunded by reason of-- (a) fraud; or (b) collusion; or (c) wilful mis-statement;or (d) suppression of facts; or (e) contravention of any of the provisions of this chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words one year , the words five years had been substituted. Explanation.--Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of one year or five years, as the case may be. 25. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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