TMI Blog2017 (6) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... iginal authority for reconsideration. Appeal allowed by way of remand. - ST/56668/2013-[DB] - ST/A/53969/2017-CU[DB] - Dated:- 15-6-2017 - Mr. S.K. Mohanty, Member (Judicial) And Mr. B. Ravichandran, Member (Technical) Ms. Rinki Arora (Advocate) for the Appellant Mr. J. P. Singh Sanjay Jain (DR) for the Respondent ORDER Per: B. Ravichandran The appeal is against order dated 20.02.20013 of Commissioner (Appeals), Indore. The appellants are engaged in providing vehicles to the clients on hire basis. The dispute in the present case relates to their service tax liability under the category of rent a cab service during the period October 2006 to July 2011. The Revenue proceeded against the appellant for non-payment of service tax during the said period by the appellant. The original authority adjudicated the case and confirmed the service tax demand of ₹ 1,89,295/-. He also imposed penalty of equivalent amount under Section 78 and further penalty of ₹ 5000 under Section 77 of the Finance Act, 1994. On appeal, vide the impugned order, the Commissioner (Appeals) upheld the original order. 2. The Ld. Counsel for the appellant submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not also allow us to hail the submissions of the petitioner that those who give vehicle without exclusive control cannot be taxed. The Tribunal ignored the legal position. There is nothing to read into the taxing statute that only those persons who own the vehicles and give their vehicles on rent with exclusive control of the customer only would be charged. 15. The Tribunal in case of R.S. Travels v. Commissioner of Central Excise, Meerut, reported in 2008 (12) S.T.R . 27 has made out distinction between providing rent-a-cab service or giving vehicle on lease or hire, to hold that ordinary meaning of the words to rent is allowing the use of something one owns in exchange for payment. Therefore, the test for ascertaining whether an activity is covered by the entry rent-a-cab operator service is as to whether it involves giving the cab, with or without the driver, to a client for a certain period of time for some consideration. However, when a cab operator provides his cab with a driver to his client on demand for going from one place to another and charges him on per kilometer basis or a lump sum amount on distance, as fixed with the client and control of the vehicl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai Bench held that the appellant failed to produce the evidence to indicate that the car was actually hired by customer and not rented. He could not escape the tax liability on the ground that hiring was different from renting since the Government s intention was to tax the service providers of a service, which involved hiring/renting of a cab formally for a long duration, unlike the Yellow Black cabs which were only engaged by a person for short time. 18. The Delhi Tribunal in the case of Ghansyam Gupta v. CCE, reported in (2007) 11 STT 130 , found that the assessee had rented out a vehicle to a hirer where vehicle was to be stationed at the premises of hirer and was under his exclusive control. This was held as a clear case of rent-a-cab service. The person, thus, who is engaged in the business of engaging taxis for customers and giving them service without even owning or plying vehicle also can be held liable for paying service tax under the category of Rent-a-cab Scheme Operator . 19. The Madras High Court in the case of Secretary, Federation of Bus-operators Assn T.N. v. UOI (supra), examined the issue of service tax applicable to the tour operators ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2(22) of the Motor Vehicles Act provides maxi cab means any motor vehicle constructed or adapted to carry more than six passengers but not more than twelve passengers excluding the driver for hire or reward. Similarly, Section 2(25) of the Motor Vehicles Act provides motor cab means any motor vehicle constructed or adapted to carry not more than six passengers excluding the driver for hire or reward. (48) There can be no doubt that such motor cabs or maxi cabs are plied as contract carriages and/or under Section 88(9) of the Motor Vehicles Act read with Rules 82 to 85 of the Motor Vehicles Act. It would, therefore, be clear that the moment a vehicle which carries the permit as a motor cab or maxi cab is rented by a person, who is engaged in the business of renting cabs, such person who is so engaged in the business of renting cabs would be in the tax dragnet of service tax. (49) The main argument by some of the learned Counsel was that a person who owns a motor cab or maxi cab is not a tour operator within the meaning of Section 65(52) of the Finance Act as the permit granted to ply the motor cab or maxi cab is not necessarily a tourist permit nor could s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... services offered by the tour operators. That subject is entirely distinct and separate from the subject of the services provided by a rent-a-cab scheme operator though relevant as we have already shown in paragraph 50 while dealing with the petitions of tour operators . We have already pointed out that the only requirement is the user by a person of the tourist vehicles for the tour and being engaged in that business. We have no doubts that a cab-owner who engages in that business for the purposes of renting a cab could also be held to a tour operator and would be covered under Section 65(50), (51) and (52) of the Finance Act. (54) We have, therefore, no hesitation in holding that if the petitioners are plying the maxi cabs or motor cabs and giving the services in relation to the renting of a motor cab or maxi cab then, they would be in the tax-net and cannot complain that they are not covered by the Finance Act. 20. The Punjab Haryana High Court was also considering the question as to whether transport service provided by the respondent-firm to the Indian Oil Corporation was liable to service tax or not? The Court, after considering various provisions as als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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