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2015 (12) TMI 1448 - CESTAT MUMBAI

2015 (12) TMI 1448 - CESTAT MUMBAI - 2015 (40) S.T.R. 953 (Tri. - Mumbai) - Demand of service tax - renting of cab without transferring control - whether levy of service tax under new category would mean that it was not taxable earlier - whether the appellant-asessee who was entered into a contract of hiring of vehicles falls under the category of "Rent-a-Cab scheme operator" is liable for service tax under the category of "Rent-a-Cab Service" or otherwise - Held that:- Judgement of the Hon'ble .....

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igh Court of Uttrakhand was delivered on 06.08.2014.

Further, we notice that the Hon'ble High Court of Uttarakhand in the said judgement has distinguished the judgement of the Hon'ble Madras High Court in the case of Secy. Federn of Bus-operators Assn. of Tamil Nadu [2001 (4) TMI 7 - MADRAS HIGH COURT]as well as the judgement of the Hon'ble High Court of Delhi in the case of Kuldip Singh Gill [2005 (5) TMI 353 - CESTAT, NEW DELHI]. This judgement of the High Court of Uttarakhand bein .....

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is passed to the hirer under the rent-a-cab scheme, there cannot be a taxable transaction under Section 65(105)(o), read with Section 65(91) of the Service Tax Act - Decided against Revenue. - Appeal No. ST/139, 176/09 - Final Order Nos. A/2655-2656/2015-WZB/STB - Dated:- 11-8-2015 - M V Ravindran, Member (J) And C J Mathew, Member (T) For the Appellant : Shri K S Mishra, Addl Commissioner (AR) For the Respondent : Shri P V Sadavarte, Adv ORDER Per M V Ravindran These two appeals are filed by t .....

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the category of "Rent-a-Cab Service" or otherwise. 5. It is the case of the assessee that the appellant had under a contract with Bharat Sanchar Nigam Ltd. (BSNL) for supply of the vehicles within the jurisdiction of Amravati District and they were required to supply the vehicles on hiring basis. It is the submission of the learned Counsel that the issue is no more res integra as the Hon'ble High Court of Uttrakhand in the case of CC & CE v. Sachin Malhotra and Ors. - 2014-TIO .....

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CE - 2013-TIOL-1049-CESTAT-Del. It is the submission that while upholding the tax liability, the Bench has considered the case laws which have been delivered on this particular issue and relying upon the judgement of the Hon'ble Madras High Court in the case of Secy. Federn of Bus-Operators Assn. of Tamil Nadu, - 2003-TIOL-33-HC-MAD-ST the Bench took a view that the service tax liability arises on hiring of the vehicles under Rent-a-Cab service. It is also his submission that the Bench relie .....

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ide the question of law on the issue whether hiring of vehicles would fall under the category of Rent-a-cab scheme operator" or otherwise. Their Lordships had after going into details as to what is Rent-a-Cab scheme operator, in paragraphs 16, 17 and 18 held as under: "16. What is sought to be taxed under the provisions, which we have adverted to in this judgment, is service, which is rendered in relation to renting of cabs. Under Section 65(91) of the Service Tax Act, "rent-a-cab .....

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cabs. So, the most important and crucial element, which we must bear in mind, is, whether there is a business of renting of cabs. Unless there is renting of cabs, there is no question of further enquiring as to the services, which may be rendered therein. In other words, any service, which may be rendered and which does not relate to renting of cabs, would be irrelevant for our consideration. When we consider the matter in the said light, we have no doubt in our minds that the Tribunal has, in t .....

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central government may by notification in the official Gazette, make a scheme for the purpose of regulating the business of renting of motor cabs or motor cycles to persons desiring to drive either by themselves or through drivers, motor cabs or motor cycles for their own use and for matters connected therewith . (2) A scheme made under sub-section (1) may provide for all or any of the following matters, namely;- (a) licensing of operators under the scheme including grant, renewal and revocation .....

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e of records and inspection of such records; (i) such other matters as may be necessary to carry out the purpose of this section." 17. In terms of Section 75, a scheme has been framed by the Government, which is called Rent A Cab Scheme, 1989. It contemplates the licensing of the operator; the making of an application for the licence; the grant of the licence; and the duration of the licence. We noticed, no doubt, that Clause 9 contemplates collection of hire charges. It also provides for t .....

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e licence informed of the movement of each vehicle, from time to time. (3) If a hirer so desires, he may engage a person possessing a valid driving licence to drive the vehicle so hired during the period of the hire agreement." 18. A perusal of Clause 10 would re-enforce us in the view that we are taking that, under the rent-a-cab scheme, the hirer is endowed with the freedom to take the vehicle, wherever he wishes, and he is only obliged to keep the holder of the licence informed of his mo .....

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he basis of the number of kilometers travelled. These are all matters, which are regulated by the Government. Unlike the said scenario, in the case of a rent-a-cab scheme, as is clear from the very fundamental principle underlying the scheme, it is to give the hirer the freedom to use the vehicle as he pleases, which, undoubtedly, implies that he must have possession and control over the vehicle. This is the fundamental distinction between rent-a-cab and a pure case of hiring. No doubt, the lear .....

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himself or employs somebody else to drive the vehicle; and the customer merely makes use of the vehicle by travelling in the vehicle on the basis of a contract that he will pay the requisite hire charges for the period he uses the vehicle. Unlike the same, in the case of rent-a-cab, as is provided in the Motor Vehicles Act, the person is enabled to take the vehicle with him wherever he pleases, subject, no doubt, to the terms of the contract between the parties and he uses the vehicle as his ow .....

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