P.G. Chacko, Judicial Member - The main challenge in this appeal is against demand of Rs. 65,84,788 towards Service Tax and Rs. 1,31,696/- and Rs. 12,046/- towards Education Cess and SH Education Cess respectively confirmed against the appellant by the Commissioner for the period from 16.6.2005 to 30.9.2007 in adjudication of a show-cause notice issued on 20.8.2008 by invoking the extended period of limitation under the proviso to Section 73(1) of the Finance Act, 1994.

2. The appellant is registered with the department under Section 69 of the Finance Act, 1994 in respect of "transport of goods by road service", "renting of immovable property service" and "management, maintenance or repair service". The impugned demand is under the head "maintenance or repair service" for the period up to 30.4.2006 and thereafter under the head "management, maintenance or repair service", in terms of Section 65(105)(zzg) of the Finance Act, 1994 read with Section 65(64) of the Act.

3. The appellant has three divisions including "Kuttukaran Engine Rebuilders" (KER) and the present dispute pertains to this division which is engaged in the business of reconditioning engines and parts thereof and repairs of other parts of vehicles of all brands. KER did not have any authorization from any manufacturer of vehicles/parts for providing post-sale service to buyers. During the material period, they undertook engine reconditioning works for authorised service stations, local workshops and individual owners of motor vehicles, but the charges received as consideration for such works were not included in the taxable value shown in their ST-3 returns for the period of dispute and did not pay service tax thereon under the head "maintenance or repair service" (prior to 1.5.2006) or "management, maintenance or repair service" thereafter. These facts were gathered by the department through an audit of the appellant's accounts. In a letter dated 5.9.2007, the appellant furnished to the Superintendent (Audit) of Central Excise a statement of proceeds of various works undertaken by them during the period of dispute and also supplied copies of the balance sheets for the relevant period. Subsequently, in a letter dated 5.12.2007, the Superintendent requested the appellant to pay service tax on the income received from customers for reconditioning/repairs of vehicle engines and other parts from 2005-06 onwards. The Superintendent took the view that the activities undertaken by the appellant did not amount to repairs/reconditioning of 'motor vehicles' and that they only involved repairs/reconditioning of vehicle engines and other parts which were only 'equipments/goods' and therefore the activities were not excluded from levy of service tax under the aforesaid heads. In a reply dated 27.12.2007, the appellant contested the above view of the Superintendent and maintained that the activities undertaken by them were outside the purview of levy of service tax under Section 65(64) of the Act. They contended that the reconditioning/repairing works on vehicle engines or parts thereof or on other parts of vehicles were to be treated as repairs/maintenance of 'motor vehicles', which activity stood excluded from the levy in terms of the definition under Section 65(64).

4. The appellant also adverted to the meaning of 'motor vehicle' under Section 65(73) of the Finance Act, 1994 read with Section 2(28) of the Motor Vehicles Act, 1988 and contended that, logically, the term 'motor vehicle' used in Section 65(64) of the Finance Act would include the engine, and components of the engine, of a motor vehicle and accordingly the reconditioning/repairing of engine and engine parts stood outside the ambit of levy of service tax. Subsequently, the department issued the show-cause notice to the appellant for recovery of service tax with education cess for the period of dispute in respect of the reconditioning/repairing/servicing of engines and other parts of motor vehicles, levy of inte