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TMI Blog2012 (5) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... licable. Further penalties have been imposed under various Sections of the Finance Act, 1994. 2. Heard both the sides and also gone through the relevant records and documents. 3. Appellant had entered into a contract for the period from 01.09.02 to 31.08.05 for providing 52 seater buses for transportation of ONGC shift officers/personnel from a particular point near to the residences of the employees to the plant of the company and back. The learned advocate submitted that the service provided by the appellants cannot be considered as a service of the tour operator at all. He submits that the buses used for providing the service in terms of the above contract are not covered by the definition of tourist vehicle and therefore they cannot be made liable to pay service tax. He also submitted that the requirements of tourist vehicle are specified in Section 2 (43) of Motor Vehicle Rules, 1998 and have been defined under Rule 128 of Motor Vehicles Rules 1998. He submitted that the department has treated the vehicles as engaged in contract carriage to hold the appellant liable. According to the definition of contract carriage, 'contract carriage' means a motor vehicle which car ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... term "tourist vehicle" would cover all contract carriages irrespective of the fact whether they conform to the specifications prescribed under Rule 128 of the Motor Vehicles Rules or not. He has relied upon the decision of the Hon'ble Madras High Court in the case of Sri Pandyan Travels Vs. CCE Chennai reported in 2004 (163) ELT 409 (Mad.). Para 7 of the decision relied upon by the Commissioner is extracted as under: "7. I shall refer the discussion relating to the question applicable to the case on hand. In para 36, the Division Bench has observed that "spare buses may not be the "tourist vehicles" within the meaning of Section 2 (43) of the Motor Vehicles Act and, therefore, they are not liable.." It is clear that only spare buses of the tour operators are exempted from the purview of the service tax net. It is also relevant to refer their conclusion in para 85:- "85 We now make it clear that all the writ petitions filed by the "stage carriage operators", "contract carriage operators", "cab/maxi cab operators" and "rent-a-cab scheme-operators" would be liable to the dismissed and are accordingly dismissed subject to the rider which we have spoken of in paragraph 36." 8. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of Federation Bus Operators' Association. Further, the Hon'ble High Court also observed that most of the petitioners have tourist permits which is issued for promoting tourism and obviously issued to the tourist vehicles. Therefore the conclusion is based on the assumption that when petitioner has been given tourist permit, the vehicle owned by him would be obviously a tourist vehicle. Further this Tribunal in the case of Super Travels reported in 2009 (13) STR 625 (Tri. - Del.) considered a case where buses were operated for company staff of M/s. IOCL Panipat and M/s. L & T Ltd. for conveyance of their staff from various places to Panipat refinery and back. The facts are somewhat similar to the case of the appellants. In that case after considering the submissions of both the sides, the Tribunal observed that since the vehicles used for operating tours were not tourist vehicles and therefore in view of the decision of the Hon'ble Madras High Court in the case of Federation of Bus Operators' Association, the vehicles cannot be said to be tourist vehicles and appellant in that case cannot be said to be a tour operator. In the case of Bhagwan Singh Gulati Vs. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicles shall be required to be stationed and ply from and to Ankleshwar/Bharuch/Gandhar/Vagra/Dabka/Nada or any other place under Ankleshwar Project declared later also on to various work centers/installations and back, for transportation of ONGC's shift officer/shift personnel, in general shift duty and any other duty related to ONGC's delegates visit from time to time this project. Transportation of personnel to be carried out in accordance with the instructions/directions from the transport-LVS control room. Vehicles will be required to be used in Oil Field Sites, slushy conditions and rough roads." "Vehicles should report for duty every day with sufficient fuel to run 500 Kms. In case sufficient fuel is not available in the vehicles, the kms. run and time consumed by the vehicles for refueling will be on contractor's account. The contractor shall be required to maintain the vehicles in absolute working order. If any vehicles(s) develops any defect while on duty, the contractor shall immediately replace it by a substitute vehicle(s) with the same specifications. The ONGC may however make alternate arrangements at the risk and cost of the contract and in such cases ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s can be levied. Further the contract also takes care of outstation allowance of the driver when the vehicle is detained overnight. The vehicles are required to report everyday with sufficient fuel to run 500 Kms and it is the responsibility of the contractor to provide the vehicle. 10. This is nothing but a rental agreement. When a vehicle is hired it is invariably for a specific distance or for specific time period or for going from one place to another. In such cases, the contract would not be for a long time but invariably for a specific purpose. In fact the decision of the Tribunal in the case of Vijay Travels went in favour of the appellant specifically for this reason. In that case the contract was for a limited period and the vehicle could be called whenever required and the charges were to be paid on a km basis based on the certificate of the officer who travelled by the vehicle. The facts in the case of Vijay Travels and the facts in this case are entirely different and not at all comparable. The relevant observations of this Tribunal in that case are reproduced below: "As is seen from the above clauses and instructions so reproduced, the vehicle itself is not given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Motor Vehicles Act, 1988 according to which a person who has not less than 50 cabs is licensed to be an operator of such a Scheme; that the Commissioner proceeded on the basis that renting and hiring are synonymous; that hiring means giving to another person temporary possession and use of property for money whereas renting involves a contract to part with the property for a consideration; that in the case of H.S. Rikhy v. New Delhi Municipality the S.C [AIR (1962) 554 (V 49C 84] held that rent involves transfer of intent by landlord in favour of tenant and that in their case mere hiring of cab only takes place; that if renting a cab is held to be synonymous with hiring a cab then all the yellow and black taxis running on meters will have to pay service tax as they also provide the same type of service. 4. Shri U.H. Jadhav, the ld. JDR for the Department submitted that all the pleas of the appellants have been met by the Commissioner; that the words and phrases in a taxing statute should be accorded ordinary meanings; that renting a cab includes hiring out a car; that on all inclusive word such as 'rent' has been used in the taxing statute so as to include persons who hir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n. It was submitted by the learned advocate that there was a dispute as to whether the services provided by the appellant was liable to service tax or not. Therefore there was a genuine doubt and a bonafide belief about non liability to service tax in the mind of the appellant. He cited several decisions in support of his contention about bonafide doubt. Before we consider these decisions it would be more appropriate to see whether the claim of bonafide doubt itself is acceptable. As seen from the records, the appellant had obtained registration in the year 2002 itself. Even though it has been claimed in the appeal memorandum that on getting the advice from a tax consultant, they were advised that the contract is a hire contract and therefore they need not pay service tax, it is not indicated as to who was the tax consultant, who gave the advice; whether he had gone through the contract; whether he had been informed of all the aspects of the case when he was addressed to give the opinion and when he gave the opinion. Therefore this contention is not supported by any evidence. On the other hand it is noticed from the records that appellant themselves had written a letter to Deputy G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V Murthy) Member (T) Per: Mrs. Archana Wadhwa: I Have gone through the order proposed by my learned brother. I agree with the conclusion arrived at by him in respect of the Service Tax charged on the services under the category of 'Tour Operator'. However, I do not find myself in agreement with the findings arrived at by my learned brother in respect of 'rent-a-cab' service and propose to record a different order on merit as also on limitation. 2. The various clauses of the contract entered into by the appellant with ONGC stand reproduced in the order of learned Member (Technical). I find that apart from the fact that contract used expression 'hiring and hiring charges' at various places, some clauses of the contract are also required to be taken into consideration for arriving at a final finding. Accordingly, I reproduce the same as under:- "6.4 Normally 12 hours duty timings will be fixed by the ONGC for each vehicles as per requirement of everyday depending upon the exigencies of the work. Generally, the vehicles are required to report for all the days in a calendar month. However, 4 (Four) days in a calendar month will be allowed for maintenance p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e vehicle(s) is/are required to report and or is/are released at some other place, the distance between the points by shortest route and time required for traveling between that place and the garage of the contractor whichever is less, will be taken into account for payment. 6.22 The Vehicle's speedometer/odometer should be with correct accuracy and with correct working condition. Any defect noticed therein must be rectified within a week time otherwise a L.D. Rs. 100/-per day in each case will be charged till it is repaired. Till such time the meter starts working, the kilometers of journey for various places shall be declared by user/DGM(LGTS) in accordance with the notified distance National Highway/PWD for these period. The decision of DGM(LGTS) shall be final in this regard. 6.27 Already produced by Learned Member (Technical). 6.28 It is the responsibility of the contractor that the driver of the vehicle should ready to move for outstation duties with short notice of time and report for the same fully prepared to stay outside for total number of days as per the instruction by the user/officer. Failure to comply will lead to dehiring of the vehicle. 6.29 The contractor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in triplicate and submit to the DGM(LGTS), Ankleshwar enclosing therewith two copies of log book sheets of all hired vehicle (original and second copy) for checking and verifications. To each vehicle log book sheets, the following certificate is to be enclosed duly signed by the concerned user officer of the Vehicles. "Certified that all the entries recorded in the log books of the vehicle in question for the month __________ have been duty verified and checked and found correct. The journeys are performed in the interest of ONGC's bonafide work only". Payment shall be made by A/c payee cheque drawn on SBI. In the event of any dispute over this, the decision of DGM(LGTS) ONGC, Ankleshwar will be final and binding. 13,4 In case, any of the vehicle(s) supplied by the contractor run below the monthly fixed kilometers in any month, the difference between the kilometers fixed and actual run by such vehicle(s) will be deducted from the total additional kilometers run by other vehicles supplied by the same contractor and payment will be made for the kilometers so arrived at (beyond the fixed monthly kilometers run)." 3. Whether the assessee is providing 'rent-a-cab' servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22 of the contract requires the contractor to keep speedometer/odometer with correct accuracy and with correct working condition. In terms of the other clauses of main clause No.6, maintenance, behaviour, discipline of the driver of the vehicle is the responsibility of the appellant. Clause No.7.6 requires the appellant to provide suitable replacement of the vehicle in case the hired vehicle breaks down on the way. 4. Perusal of all above clauses reflects upon the fact that the vehicle was not rented to ONGC. If the same would have been rented out to ONGC, it would have been the responsibility of ONGC to ensure maintenance and proper running of the same. In case of rent, owner of the property is de-possessed from the possession and same passes on in the hands of person who has taken out the same for usage. The possession of the vehicle in present case remained with the appellant and he was required to provide the service of the same for a period of 12 hours in a day. For maintaining, re-fueling, repair etc of the vehicle, the appellant was not being provided with any extra charge. In case of break down of the vehicle, the contractor was required to replace the same as per the sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent. 6. Reference to Clause 12 covering the schedule or rates showing minimum fix charges per vehicle per month upto a total run of 2400 kilometers being Rs. 12,000/- stand explained by the Learned Advocate appearing for the appellant, in the light of the note appearing below the said sub-clause. It stand contended before us that inasmuch as the appellants were providing number of vehicles to ONGC, the said clause No.12.1.1 is only a safety measure to ensure some minimum payment and to avoid Nil payment if ONGC does not uses the vehicle at all. As such, the said clause is only a minimum guarantee given by ONGC. Further, Clause 13.4 makes it clear that in case of particular vehicle runing below minimum monthly fixed kilometers in any month, the difference between the kilometers fixed and actually run by such vehicle will be deducted from the total additional kilometers run by other vehicles supplied by the same contractor and payment will be made for the kilometers so arrived at. The effect of above clause is that if one vehicle run below 2400 kilometers and other vehicle run more than 2400 kilometers, the total distance covered by two vehicles would be taken into consideration a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that the appellants are not engaged in providing 'rent-a-cab' service during the relevant period and were not liable to pay Service Tax. 10. I have also gone through the order of my learned brother in respect of limitation. I find that the period involved in the present appeal is from April 2000 to May 2004, whereas the show cause notice was issued on 15.03.05. Learned Advocate has strongly contended that though they had taken the Service Tax registration with the department on 14.01.02 for 'rent-a-cab' service, they were advised by their tax consultant that the contract being a hired contract, is not covered by the scope of definition of 'rent-a-cab' operator. It stand strongly contended that during the relevant period, there was confusion and doubt in respect of liability of such services to Service Tax and their being a Tribunal's decision in their favour, they were under a bonafide belief that such service is not taxable. In fact, submits the Learned Advocate that if the Service Tax was payable, the same would have been collected by them from ONGC and deposited with the Revenue. There can be no intent or motive on their part to evade payment of Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... views of Hon'ble High Courts, extended the period of 5 years cannot be invoked, as no evidence of any fraud/collusion/willful mis-statement or suppression of facts available with the department. It was further held that mere not taking licence or not paying duty, is not sufficient to invoke extended period. Such judgment passed by Hon'ble Apex Court by taking into consideration their precedent decisions like in the case of Padmini Products. As such, I am of the view that the demand having raised by invoking longer period is barred by limitation. 13. In view of the above, I set aside the confirmation of demand against the appellant. As a consequence, no penalty is required to be imposed. Accordingly, the impugned order is set aside on merit as also on limitation. (Archana Wadhwa) Member (J) Difference of Opinion i) Whether on perusal and examination of various clauses of the contract, it has to be held that the appellant was providing 'rent-a-cab' services as held by learned Member (Technical) or the same amounted to hiring of the vehicles and not covered by the definition of 'rent-a-cab' service as held by Member (Judicial). ii) Whether in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the said clauses, as reproduced by the learned Member (Judicial) in her order in Para-2, clearly indicate that the contract is for hiring out of Cars to ONGC for a limited purpose. After taking me through all the clauses, he would draw my attention to the definition of Rent-a-Cab Operator service during the relevant period, which read on the Rent-a-Cab Scheme Operator is, any person engaged in the business of renting of cabs. He would submit that the judgments relied upon by the learned Member (Technical) in his decision were all of Single Member Benches and he would rely upon the decision of the Division Bench in the case of Vijay Travels - 2010 (19) STR 671 and Shri Sai Krishna Travels - 2010 (18) STR 220, where an identical issue has been decided by the Division Bench. 3. Shri K.M. Mondol, learned Special Counsel appointed by the Revenue would take me though order of the Member (Technical). It is his submission that the difference of opinion in this case is only in respect of service tax liability on the assessee under the head Rent-a-Cab services. It is his submission that the contract which has been entered into by the ONGC and appellant clearly indicates that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there is no dispute as regards the fact that the assessee had an agreement with ONGC for the purpose of giving vehicles to transport the employees of ONGC to various places. As correctly pointed out by the learned counsel that Member (Judicial) had reproduced various clauses of contract in her differing order in Para 2. On perusal of such clauses, I find that the said agreement is between ONGC and the assessee and is for transportation of personnel and their delegates under the instructions and direction from the officials of ONGC. There are very clear clauses which indicates that the charges that has to be paid to the assessee appellant has to be based basic distance and any express travelled will upon pro-rata kilometres traversed. The clauses also indicate very clearly that the appellant is responsible for maintenance of the vehicles and he is suppose to fill the fuel and make the vehicle available along with the driver and substitute the vehicle in the case of any break down of vehicle. I find that the said clauses clearly indicate that the appellant herein is in possession of vehicles and is only hiring out the vehicles to ONGC for a stipulated period or as per the agre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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