2011 (7) TMI 938 - AT - Service Tax

Demand - On account that the applicant is running an authorised service station - The contention of the applicant is that as per the definition of authorised service station, only service, repair, reconditioning of motor car, light motor vehicles or two wheelers are covered - As the light motor vehicle means any motor vehicle constructed or adapted to carry more than six passengers but not more than 12 passengers - Held that Prima facie, the applicant is not covered under the definition of the light motor vehicle as per the Motor Vehicle Act - Appeal is allowed by way of remand to Commissioner (A)

Summary

Issues:
Appeal for waiver of service tax and penalty due to misinterpretation of the definition of authorized service station under the Motor Vehicle Act.

Analysis:
The appellant filed an appeal seeking the waiver of service tax and penalty amounting to Rs. 28,836/-, contending that the definition of authorized service station does not cover three-wheelers, which they service after sales. They argued that as per Section 65(62) of the Motor Vehicle Act, a light motor vehicle is defined as a vehicle constructed or adapted to carry more than six but not more than 12 passengers, excluding three-wheelers. The appellant claimed they do not fall under the scope of an authorized service station based on this definition.

The Revenue, on the other hand, highlighted that the Commissioner (Appeals) had directed the appellant to deposit 50% of the amount for the appeal hearing, which the appellant failed to do, resulting in the dismissal of the appeal without delving into the case's merits. It was asserted that the appellant, being a provider of taxable service, is liable to pay service tax.

Considering the total demand of only Rs. 28,836/- and the prima facie observation that the appellant does not fall within the definition of a light motor vehicle as per the Motor Vehicle Act, the Appellate Tribunal decided to waive the pre-deposit of service tax and penalties during the appeal's pendency. The Tribunal found that the Commissioner (Appeals) did not address the appeal's merits, leading to the decision to remand the matter back to the Commissioner (Appeals) for a merit-based decision without requiring any pre-deposit. Consequently, the appeal was allowed by way of remand, setting aside the impugned order.

In conclusion, the Appellate Tribunal's decision to remand the case for a merit-based assessment without insisting on a pre-deposit reflects a fair and just approach, ensuring that the appellant's arguments regarding the misinterpretation of the authorized service station definition are adequately considered.