Non-Authorised service station not liable to pay Service tax on Maintenance or Repair of any ‘part’ of motor vehicle – SC dismissed SLP filed by the Department
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 undertook 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 amount 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 Department 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:
Being aggrieved, the Department filed a Special Leave Petition (SLP) before the Hon’ble Supreme Court against the judgment 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, Maintenance or Repair Services’ and are not liable to Service tax.