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2010 (7) TMI 830 - AT - Service TaxRent-a-cab service - service tax not paid, even though the same has been collected - case of appellant is that when a vehicle is given to a client for a certain period of time for some consideration or for going from one place to another and charge is made on per KM basis or lump sum amount based on distance, such service cannot be held liable to service tax and is not covered by rent-a-cab service - Held that: - no evidence has been brought out by the Revenue to show that vehicle was rented out for a specified period of time to a customer and the charges were not being collected on the basis of per KM/per hour or lump sum for distance travelled etc. - When the charges are revealed on the basis of per KM or lump sum for distance or per hour basis, it cannot be said to be covered by a rent-a-cab service. Another factor that is to be taken note of is that in this case there is no written agreement with any customer. Normally whenever vehicles are rented out for a specified period there would be a written contract specifying the conditions. The absence of such a contract also supports the case of the appellants. The appellants are not liable to pay service tax. However since having already collected the service tax, whatever has been collected is required to be deposited as per law with interest - there is violation of provisions of FA, 1994 rendering them liable to penalty u/s 77 of FA, 1994 - appeal allowed - decided partly in favor of appellant.
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