TMI Blog2015 (11) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... for booking the radio taxi for the journey and if there is any deficiency of services, the appellant is hauled before the courts and not the driver as also for any misdemeanor of the driver. The entire findings of the adjudicating authority has been misdirected to hold that the driver keeps bulk of the amount of the journey and deposits only small portion of the amount as agreed between the appellant and the driver, which indicates the radio taxi is given for use and covered under STGU. The confusion has arisen due to the reason that the driver depositing the money is considered service recipient for use of such road taxi or supply of tangible goods. In the entire exercise the adjudicating authority has lost the sight of the fact that the supply of tangible goods in the case in hand is not for the use of the driver, but it is for the use of the appellant herein as recorded by us herein before; the entire action of booking of the radio taxi till the collection of the fare from the customer/passenger is on behalf of the appellant. It is also noted from the records that appellant is providing training to the driver and drivers are compensated adequately for the driving undertaken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand of the service tax for the period 16.05.2008 to 30.09.2010, invoking the extended period by alleging suppression, misstatement of facts, show cause notices dt 3.10.2011 and 20.10.2012 were issued for the period 01.10.2010 to 31.03.2012, and also directing appellant to show cause why demand of service tax along with interest be not confirmed, and penalties be not imposed on them. Appellant contested the show cause notice's on merits as well as on limitation in respect of the show cause notice dt. 20.10.2010. Adjudicating authority after following due process of law, did not agree with the contention raised by the appellant and confirmed demand raised with interest, as also imposed penalties. 3. Ld. Counsel appearing on behalf of the appellant submits that the impugned order is incorrect on facts as well as on law. After apprising of, overall picture of the activity undertaken by the appellant, he would submit that Radio Taxi Scheme is provided under a specific provision of law which grants permission to only those operators, who are either a company or a partnership form or society and should have minimum 500 number of radio taxis and operator is required to obtain tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assengers to deposit the fare directly with the appellant, appellant authorizes the driver to collect the fees from individual passengers and hold it with him till end of day and at the end of the day in terms of agreement, driver deposits an amount into the account of the appellant. It is his submission that this contract has been misread by the adjudicating authority to hold that the appellant is providing STGU in form of handing over the taxi to the individual drivers. It is his further submission that agreement is for engagement of independent services of driver, and it was drafted keeping in mind various Labour Law Regulations. He would submit that department is in error for construing flow of consideration to appellant; from driver as amounting to services rendered by appellant, and appellant provides transportation services to passenger for which payment/fare is collected by the driver being the point of contact between appellant and passenger; entire fare is the property of appellant and required to be deposited by driver with appellant. In return, driver is to be compensated for his services. It is his submission that the flow of consideration engaged in this case is from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on behalf of the Revenue would submit that as per Section 65(105)(zzzzj) of the Finance Act, taxable service means any service provided or tobe provided to any person in relation to Supply of Tangible Goods including machinery, equipment and appliances for use without transferring right of possession and effective control of such machinery, equipment and appliances. He would submit that the definition of STGU consists of three parts (a) Supply of Tangible Goods (b) For use (c) without transferring the right of possession effective control. It is his submission that the taxis are used by the driver for running services and hence cannot be said that STGU is not attracted when the use of the taxi is not in disputed. He would then take us through the agreement entered by the appellant with individual drivers and read relevant paragraphs from them and submit that as per the agreement, it clearly comes out that appellant has allowed the subscriber (read as driver) use of the particular taxi for operating as a Meru Cab. He would submit that reliance is placed on the decision of the Hon'ble High Court of Karnataka in the case of BhartiAirtel Ltd. vs. State of Karnataka 2012 (25) S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a particular area. It is also undisputed that in order to get a radio taxi/fleet taxi license, the operator is per-se required to be a company or a partnership firm or a society and definitely not an individual; operator must have minimum number of 500 radio taxi to put into operations; operator is required to obtain taxi permits from the concerned state authorities in their name and the fare to be charged by such radio taxi operator is fixed by the State Government based on deliberations along with the operator. It is also undisputed that the radio taxi operated by the appellant are booked by a Customer through a call placed directly to the appellant-company, though the taxi driver is not prohibited from entertaining customers from the kerb side pick up. On booking of a taxi, by individual customer, appellant decides which taxi will be attending the customer for transporting him to his desired destination; the customer is issued a bill /print out of the fare bill by the taxi driver on completion of the journey and the said fare bill is issued in the name of the appellant herein. It is also undisputed that the appellant enters into individual agreement or contract with the driver ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... structions and directions from the appellant only. Passenger or a customer contacts appellant for booking the radio taxi for the journey and if there is any deficiency of services, the appellant is hauled before the courts and not the driver as also for any misdemeanor of the driver. It can inferred be safely presumed after perusing the clauses of the agreement between the appellant and the driver, the driver is collecting the fare amount from the customer on behalf of the appellant, as fare invoice for the journey is created and issued in the name of the appellant. The entire findings of the adjudicating authority has been misdirected to hold that the driver keeps bulk of the amount of the journey and deposits only small portion of the amount as agreed between the appellant and the driver, which indicates the radio taxi is given for use and covered under STGU. The confusion has arisen due to the reason that the driver depositing the money is considered service recipient for use of such road taxi or supply of tangible goods. In the entire exercise the adjudicating authority has lost the sight of the fact that the supply of tangible goods in the case in hand is not for the use of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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