TMI BlogNon-Authorised service station is not liable to pay Service tax on Maintenance or Repair of any ‘part’ of motor vehicle – SC dismissed SLP filed by the DepartmentX X X X Extracts X X X X X X X X Extracts X X X X ..... Non-Authorised service station is not liable to pay Service tax on Maintenance or Repair of any ‘part’ of motor vehicle – SC dismissed SLP filed by the Department - By: - Bimal jain - Service Tax - Dated:- 19-2-2015 - - Dear Professional Colleague, Non-Authorised service station is not liable to pay Service tax on Maintenance or Repair of any part of motor vehicle - SC dismissed SLP file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Department We are sharing with you an important judgment of Hon ble Supreme Court, in the case of Commissioner of Central Excise, Customs and Service Tax, Kerala Vs. Kuttukaran Trading Ventures [ 2015 (1) TMI 858 - SUPREME COURT )] on the following issue: Issue: Whether Non- Authorised service station is liable to pay Service tax on Maintenance or Repair of any par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of motor vehicle ? Facts and background: In the instant case, Kuttukaran Trading Ventures ( the Assessee ) was engaged in the business of reconditioning engines and parts thereof and repairs of other parts of vehicles of all brands. The Assessee did not have any authorization from any manufacturer of vehicles/ parts for providing post-sale service to buyers. The Appellant under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... took engine reconditioning works for authorised service stations, local workshops and individual owners of motor vehicles. However, no Service tax was paid on the charges received as consideration for aforesaid works. Accordingly, the Department sought levy of Service tax under Management, Maintenance or Repair Service on the ground that the activities undertaken by the Assessee did not amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to repairs/ reconditioning of 'motor vehicles'. Said activities only involved repairs/ reconditioning of vehicle IC engines and other parts, which were only equipments/ goods' and therefore the activities were not excluded from levy of Service tax under 'Management, Maintenance or Repair Service'. On appeal being filed to the Hon ble Tribunal, the contentions of the Depar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tment were upheld and demand of service tax was confirmed along with interest and penalty. Being aggrieved, the Assessee filed an appeal before the Hon ble High Court of Kerala. The Hon ble High Court decided the matter in favour of the Assessee, holding the following: As per Section 65(64) of the Finance Act, 1994 ( the Finance Act ), Maintenance or repair etc., of any goods or equ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipment (excluding motor vehicles) is liable to Service tax; For repair etc., motor vehicle may be dismounted either in workshop of the Assessee or in workshop of any other person or even at residence of customer, but, once a part is repaired and fitted to motor vehicle, it will have character of a motor vehicle, which can be used on road. In fact, motor vehicle includes all its parts; While ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorised service stations are liable to Service tax under separate category, exclusion from Section 65(64) is intended for small workshops; thus, exclusion of motor vehicle would mean exclusion of 'parts' as well and therefore, the Assessee and other service/maintenance centre or workshop doing maintenance or repairs of any part of motor vehicle are excluded from Service tax under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 65(64) of the Finance Act; Where there was a bona fide dispute as to whether activity was service eligible to Service tax or not, it cannot be treated that there was a deliberate attempt to evade tax. Hence, imposition of penalty is itself bad in law. Held: Being aggrieved, the Department filed a Special Leave Petition ( SLP ) before the Hon ble Supreme Court against the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udgment of the Hon ble High Court of Kerala. Recently, the Hon ble Supreme Court has dismissed the SLP filed by the Department, meaning thereby that the decision of the Hon ble High Court of Kerala holds good. Accordingly, Non-Authorised Service/ maintenance centre or workshop doing maintenance or repairs of any 'part' of motor vehicle are excluded from scope of 'Management, Mainten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance or Repair Services' and are not liable to Service tax. Hope the information will assist you in your Professional endeavors. In case of any query/ information, please do not hesitate to write back to us. Thanks and Best Regards, Bimal Jain FCA, FCS, LLB, B.Com (Hons) Delhi: Flat No. 34B, Ground Floor, Pocket - 1, Mayur Vihar, Phase - I, Delhi - 110091, India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Desktel: +91-11-22757595/ 42427056 Mobile: +91 9810604563 Chandigarh: H. No. 908, Sector 12-A, Panchkula, Haryana - 134115 Kolkata: Ist Floor, 10 R G Kar Road Shyambazar, Kolkata - 700 004 Email: bimaljain@hotmail.com Web: www.a2ztaxcorp.com Disclaimer: The contents of this document are solely for informational purpose. It does not constitute professio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal advice or recommendation of firm. Neither the authors nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this document nor for any actions taken in reliance thereon. Readers are advised to consult the professional for understanding applicability of this newsletter in the respective scenarios. While due care has been ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken in preparing this document, the existence of mistakes and omissions herein is not ruled out. 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