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2015 (11) TMI 835 - CESTAT MUMBAI

2015 (11) TMI 835 - CESTAT MUMBAI - 2016 (41) S.T.R. 660 (Tri. - Mumbai) - Demand of service tax - Tour Operator Service - Held that:- appellants have only planned for providing vehicles of a specific capacity with a particular schedule. We also note that at the time of expansion of the definition of Tour Operator on 10/09/2004, CBEC Circular No. 80/10/2004-ST dated 17/09/2004 clarified that while the existing levy on tour operators engaged in operating tours in tourist vehicles remain as such, .....

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post 10-09-2004. - Decided in favor of assessee.

Employees of only those companies/factories etc. who had entered into a contract with M/s. Ideal had the authority to board the buses at pre-determined pick-up points at fixed timings agreed upon and M/s. Ideal had no authority to pick-up or drop any other passenger en-route. Thus, I find from the above that M/s. Ideal were not engaged in the business of planning, scheduling, organizing or arranging package tour of their own as provided .....

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ning, scheduling etc in terms of the first part of the definition irrespective of the fact that the vehicle is not a tourist vehicle. This is because the two parts of the definition are independent and for the activity to be taxable, either part may be satisfied. - find there is reasonable cause to waive the penalties in this case in terms of Section 80 - Decided partly in favour of assessee. - Appeal No. ST/58/2010-Mum, Appeal No. ST/61/2010-Mum, Appeal No. ST/201/2010-Mum, Appeal No. ST/204/20 .....

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involved in all the appeals is common, therefore we are deciding them by a common order. In some cases the parties are in appeal against Orders confirming demands of service tax while in other cases the Revenue is in appeal against Orders under which the demands have been dropped. 2. The parties are engaged in providing buses/vehicles on hire on contractual basis to various customers like companies, factories, commercial establishments, schools etc. The vehicles operated between specified points .....

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perator' as well as various judgments on the issue. 4. We have carefully considered the facts and submissions made by both sides. We find that prior to 10.9.2004, the definition of 'Tour Operator' was as under: "Tour Operator means "any person engaged in the business of operating Tourist Vehicles covered by a permit granted under the Motor Vehicles Act, 1988 or the rules made thereunder". It is apparent that to be covered under this definition the vehicle must be a tou .....

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to certain specifications. These specifications relate to dimensions, structures, passenger entrance and exit, emergency exit, driver entry and exit, wind screen, windows, ventilation, lighting, fitting and accessories etc. Thus for a vehicle to be given the permit of a Tourist vehicle there are elaborate specifications to be observed. It goes without saying that the proper authority to decide whether a vehicle is a contract marriage equipped with certain specifications as per Rule 128 of Centr .....

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the appeals, we find that Revenue has not challenged that the vehicles are not Tourist vehicles in terms of Rule 128 of the Motor Vehicles Rules. In the case of Lawrence Travels, Ideal Travels and Buthello Travels, the Commissioner has specifically recorded that there is nothing on record to show that the vehicles are tourist vehicles in terms of rule 128. 4.2 The Ld. AR appearing on behalf of the Revenue stated that the definition of Tourist vehicle refers to a contract carriage and contract c .....

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40 of 2011 filed by the Commissioner (Commissioner Vs. Bharat Travels 2012 (27) STR J79 (S.C.)). Again, the Tribunal in the case of Commissioner of C.Ex., Indore Vs. Ramsons Travels & Tours 2009 (14) STR 372 (Tri. - Del.) while relying on the Hon'ble Madras High Court judgement in the case of Secy. Federn. Of Bus-Operators Assn. of T.N. Vs. Union of India 2006 (2) S.T.R. 411 (Mad.) held that the vehicles in question which are covered under the definition in Section 2(43) of Motor Vehicle .....

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zed words). Therefore, it cannot be said that the said vehicle which is covered under Section 72(2)(xvii) can never become a "tourist vehicle". We hasten to add, however, that before any such vehicle is treated as a "tourist vehicle", it will have to conform to the conditions laid down for the tourist vehicle in Rule 128 of the Motor Vehicles Rules. That would by far be the only condition."…………………………&h .....

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t vehicles" within the meanings of Section 2(43) of the Motor Vehicles Act read with Rule 128 of the rules framed thereunder then, such petitioner would not be required to be registered under the Finance Act. The learned Senior Counsel for the Department very fairly accepted this position. However, he pointed out that it would be for the petitioners to raise their objections before the concerned authorities under the Finance Act and their objections would be decided upon. Therefore, the pet .....

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of Section 65(51) and the other allied sections like Section 66(3), etc." 4.3 The Ld. AR tried to distinguish the above finding from the conclusion of the High Court judgment. We may therefore see the concluding para of the judgement. It reads as "85. We have already found that the argument regarding the non-applicability of the provisions of the Finance Act to the stage carriage operators, contract carriage operators, cab/maxi cab operators, is absolutely incorrect. We have already in .....

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ot;contract carriage operators", "cab/ maxi cab operators" and "rent-a-cab scheme-operators" would be liable to be dismissed and are accordingly dismissed subject to the rider which we have spoken of in paragraph 36." We find that the conclusions reached in the judgment are very clear. The rider in para 36 is that, to be a 'Tourist Vehicle the requirements of Rule 128 have to be satisfied. The same position has been upheld in the Tribunal judgment in the case of .....

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in the Civil Appeal filed before it against the High Court Order, the Hon'ble Supreme Court remanded the case to the High Court to address the substantial question of law - [2010 (17) S.T.R. 513 (SC). We note that the basic observation in all the judgments is that the vehicle should meet the specifications of Tourist vehicles as specified under Rule 128 of the Central Motor Vehicles Rules. 4.5 Ld AR interpreted the judgement in Secy. Federn. Of Bus-Operators Assn. of T.N. to mean that all c .....

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t in the present case, we are not concerned with the two kind of permits. The question posed before us is whether a vehicle covered under Section 72(2)(xvii) of the Motor Vehicles Act can be viewed as a tourist vehicle. The question is not as to whether a permit under Section 88(8) would ipso facto become a permit covering a contract carriage. It has to be borne in mind that a tourist vehicle as defined under Section 2(43) of the Motor Vehicles Act which definition has been picked up as it is by .....

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ecome a tourist vehicle. A plain reading of the provisions of the Motor Vehicles Act says that any such vehicle which answers the description of the tourist vehicle under Rule 128 and which would run under a contract would become a tourist vehicle and once it becomes a tourist vehicle so long as it is being used under any permit under the Motor Vehicles Act, by a person who is engaged in the business of operating the tours then, the requirement of the Finance Act would be complete." Therefo .....

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tion for a person to be held as a "tour operator" within the meaning of Section 65(52) of the Finance Act is that he must be engaged in the business of operating tours in a "tourist vehicle" in terms of Section 2(43) of the Motor Vehicles Act and in no other type of vehicle and, therefore, necessarily such vehicle must conform to the conditions prescribed under Rule 128 of the Central Motor Vehicles Rules". The views expressed above find confirmation from the fact that t .....

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iage permit, granted under the Motor Vehicles Act, 1988 or the rules made thereunder". Thus the intention to include all contract carriages in the definition was given effect from this date only. 4.7 Revenue, it appears, is confusing the words "Tourist permit' and "Tourist vehicle' and reading the word 'permit' to mean the same as Tourist permit. Here too the judgement in Secy. Federn. Of Bus Operators Association of T. N. (supra) clarifies the matter beyond doubt. .....

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r under 1993 Rules only for "tourist vehicles" and therefore, any "tourist vehicle" must have a "tourist permit". The logic is obviously incorrect because even under the Motor Vehicles Act a "tourist vehicle" does not necessarily need a "tourist permit". All that is contemplated under Section 2(43) of the Motor Vehicles Act while defining the "tourist vehicle" is that it should be a "contract carriage" and should have been con .....

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ge of Section 65(50) to (52) alone in interpreting those provisions. Merely because the Motor Vehicles Act provides for "tourist permit", it would not mean that Section 65(52) of the Finance Act also contemplates only a "tourist permit". We cannot do violence to the language of the provisions by holding that a "tourist vehicle" contemplated under the Finance Act must be a vehicle having only "tourist permit." Some other decisions cited by the Ld AR are sta .....

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r accommodation, sight seeing or other similar services) by any mode of transport and includes any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1977 or the Rules made there under". As per the first part of this definition, any person who is engaged in the business of planning, scheduling, organizing or arranging tours is a Tourist Operator. We have already noted that the second part of the definition, which .....

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finition. In such cases the appeals fail as held in para 4 above. 5.1 In other cases we may examine whether the appellants are engaged in the business of planning, scheduling, organizing or arranging tours. We have seen the Agreements between appellants and their clients. We find that the appellants have only planned for providing vehicles of a specific capacity with a particular schedule. We also note that at the time of expansion of the definition of Tour Operator on 10/09/2004, CBEC Circular .....

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he levy of service tax for planning/scheduling /organizing/arranging the package tours for all modes of travel. It was not intended to expand the scope to cases such as the present one. In the present case, the appellants provide/supply the contract carriage business (not tourist vehicles) to their customers on their demand only. Therefore the activity of the appellant is not covered by the definition of "Tour Operator' for the period post 10-09-2004. 5.2 We see from the records that th .....

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ing extended by removing the limitation regarding transportation by tourist vehicles only. Such tourist operators would be subjected to service tax irrespective of the mode of transport used during such tours. However, M/s. Ideal were providing vehicles/buses to their customers, under an agreed written contract during the period specified therein for an agreed commercial consideration for transportation of the company/factory employees, at specified places through specified routes and timings. A .....

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ity to pick-up or drop any other passenger en-route. Thus, I find from the above that M/s. Ideal were not engaged in the business of planning, scheduling, organizing or arranging package tour of their own as provided under the new definition of 'tour operator' service but were adhering to the conditions laid down in the agreements entered into with various customers. Thus it cannot be said that they were covered under the first part of the amended definition of 'tour operator' al .....

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