2019 (2) TMI 874

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....read with Section 73(1) of the Finance Act, 1994 (the Act) and also ordered for payment of interest under Rule 14 of CCR read with Section 75 of the Act and also imposed penalty of Rs. 1,08,807/- under the provisions of Rule 15(3) of CCR read with Section 78 of the Act. The Commissioner(Appeals) has dropped the demand for the period 2008-09 to 2010-11. 2. Briefly the facts of the present case are that the appellants are engaged in servicing of motor vehicles falling under the category of 'authorised service station service taxable under Section 65(105)(zo) of the Act. During the audit by the officers of the Internal Audit Party of Service Tax Department, Bangalore, it was observed that the appellants were engaged in providing taxable ser....

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....their output service. During the course of servicing, they sell some spare parts on which VAT is paid and the use of such new spare parts in the course of servicing is only a part of servicing and cannot be considered as trading. He further submitted that by virtue of Notification No.3/2011 dt. 01/03/2011, trading is included within the purview of exempted services only w.e.f. 01/04/2011 and provision of Rule 6 is not applicable to their case as the demand pertains to the period prior to 01/04/2011. He further submitted that they have taken separate registration for show-rooms and each of their service stations for servicing of motor vehicles under the category of authorized service centre and that they are availing CENVAT credit on input s....

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....that trading is exempted service even prior to 01/04/2011 and therefore the appellants are liable to pay. 6. After considering the submissions of both sides and perusal of the material on record and the various decisions, I find that the Commissioner(Appeals) has dropped the demand for the period 2008-09 to 2010-11 on the ground that the activity of trading in spares by the appellant cannot be treated as an exempted service for the period prior to 01/04/2011 since Notification No.3/2011 dt. 01/03/2011 inserting the Explanation "For the removal of doubts, it is clarified that exempted services including trading in the definition of exempted service was effective only from 01/04/2011" and the Department has not filed any appeal against the....