TMI Blog2016 (11) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax. - the impugned activities carried out by the assessee will not attract the definition of "Tour operator 'under section Section 65 (52) of Finance Act, 1994 prior to 10.092004 and under Section 65 (115) for the remainder period covered in this case. This being so, the demands involved in the appeals filed by the assessee cannot sustain and the related impugned orders are liable to be set aside - appeal dismissed - decided against appellant. - Appeal No. ST/284/2007, ST/312/2007, ST/366/2008 & ST/379/2009 - ORDER No. A/30816 to 30819/2016 - Dated:- 19-6-2016 - Ms. Sulekha Beevi, Member(Judicial) and Mr. Madhu Mohan Damodhar, Member(Technical) Shri G. Natarajan, Advocate for the Appellant Shri Anish Gupta, AR for the Respondent [Order per: Madhu Mohan Damodhar,] 1.1 The issue involved in these appeals being the same, they were heard together and are disposed by this common order. The assessee and department are referred to as their status before the original authority for the sake of convenience. 1.2 APSRTC obtained temporary contract carriage permits and special permits as per requirement from the Transport authorities. In the case of Chartered cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ST/379/2009 OR No.77/2008 dt. 22.10.08 2007-09 13/2009 dt.11.02.09 68,00,101 2% pm u/s 76, ₹ 1000 u/s 77, ₹ 68,00,101/- u/s 3. The main contentions put forth by the assessee in the grounds of appeal are as follows:- 3.1 At present, tour operator service covers package tour operators also. However, under the present definition, such package tours attracts service tax only if such tours involve modes of transport other than road(say a combination of air-rail-cab travel). The definition of tour operator has been suitably expanded. While the existing levy on tour operators engaged in operating tours in tourist vehicles remains as such, in case of package tour (which are planned, scheduled, organized or arranged by tour operators), the scope of the levy is being 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. The abatements (Notification No.39/97-ST) in case of package tour operators (providing transportation and ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has not obtained any tourist permit under Section 74 or Section 88(9) of Motor Vehicles Act, 1988 and hence they are not covered under the definition of tour operator of Section 65(115) of Finance Act, 1994, during the entire period of dispute, even after the said definition was amended, w.e.f. 10-09-2004 and later w.e.f. 16-05-2008. He further contended that the three types of activities undertaken by the assessee do not fall within the ambit of eligibility to service tax as follows:- (i) casual contract basis: Supply of buses to private parties on hire basis for the purpose of pilgrimage, marriages, leisure travel, meetings, excursions, etc. the vehicles having stage carriage permits are used for this purpose, by obtaining temporary contract carriage permits, under Section 88(8) of the Motor Vehicles Act, 1988, (ii) Inter-state casual contract: Same as (i) above but involves inter-state destinations. For the above two activities, the mandatory 10% of spare busies to be kept by APSRTC alone are used. (iii) Chartered Contract Services : Plying buses exclusively for the employees of certain companies/industries etc. The buses which are having Stage carriage ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the rules made under the Motor vehicles ct, 1988 or the rules made thereunder From 10-09-2004. Term defined Reference to the Finance Act, 1994 Definition Tour Operator Section 65(115) Tour operator means any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing 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 rules made under the Motor Vehicles Act, 1988 or the rules made thereunder. From 16-05-2008. Term defined Reference to the Finance Act, '1994 Definition Tour Operator Section 65(115) Tour operator means any person engaged in the business of planning, schedule in organizing or arran in tours (whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifications. The specifications are provided in Rule 128 of the Motor Vehicle Rules. The departments do not have a case that the buses of the assessee used for carrying passengers as per contract to destinations conform to such specifications so as to make them fall within the definition of contract carriages. It is not disputed that the vehicles used by the assessee for the impugned services are stage carriage vehicles and are carrying out the impugned activities only on the basis of temporary permits issued by A.P. Transport Authorities. They do not at all become contract carriages as they do not conform to the definition of contract carriage in Section 2(7) of M.V. Act. 8. The assessee admittedly obtains special permit for meeting special situation under Section 88(8) of the Act which does not fail in the definition of tourist vehicle or contract carriage and attract levy of service tax. We drew sustenance for our conclusions from the following observations of the Hon'ble Madras High Court in the SFBAT case referred to supra. 20. If we turn to the definition of the contract carriage , which is defined in Section 2(7) of the Motor Vehicles Act, it becomes clear th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 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. 25. It must be remembered that in the aforementioned decision, the Apex Court was considering the question as to whether the petitioner was excluded because of the scheme and whether the petitioner's special permit could be said to be a contract carriage as contemplated under the scheme In fact, in the beginning of paragraph 4 the Supreme Court itself says that a special permit has some of the features of the contract carriage permit. It also says that a special permit is ordinarily taken to meet a need that exists for a few days like taking a marriage party or persons going on a pilgrimage, etc. A spare bus, which answers the description of tourist vehicle as per Section 2(43) of the Motor Vehicles Act, if used for taking a marriage party or taking persons on a pilgrimage would undoubtedly be a contract carriage under the special permit though the permit under which it would be operating would carriage, i.e. within the meaning of Section 2(7) of the Motor Vehicles Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the Hon'ble High Court has decided the issue of requirement of tourist permit in favour of Revenue. They also placed reliance on decision of High Court of Madras in the case of Sri Pandyan Travels v. CCE, Chennai reported in 2006 (3) S.T.R. 151 (Mad.) = 2004 (163) E.L.T . 409 (Mad.). 4. We find that the learned Commissioner (Appeals) basing his findings on definitions of tour, tourist vehicle and tour operator which stood at the material time and certificate issued by Regional Transport Authority, Rajkot reached to the conclusion that the vehicles used by respondent were out of purview of the definition of contract carries. For better appreciation the definition of tour operator is extracted here under : Tour Operator - 'Tour Operator' means any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicle Act, 1988 or the rules made thereunder: From the above it follows that the requirement of permit granted under the Motor Vehicle Act; 1988, it was imperative that the vehicle being used by the respondent to possess tourist permit and the vehicle is a tourist vehicle. Undisputedly the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d thereunder. The argument is obviously based on the faulty logic that in Section 65(51) and (52) of the Finance Act the term tourist vehicle is used and the Motor Vehicles Act provides for the tourist permit under Section 88(9) read with Rules 82 to 85 or 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 constructed or adapted and equipped or maintained in accordance with the specifications prescribed. We have already pointed out that those specifications are provided in Rule 128 of the Motor Vehicles Rules in case of vehicles other than motor cabs. Therefore, even if the Motor Vehicles Act and the Rules framed thereunder contemplate the tourist permit, it is not necessary' that every tourist vehicle must have a tourist permit . Again, it is to be seen that we would be bound by the language of Section 65 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Tour Operator on 10-9-2004, C.B.E. C. Circular No. 80/10/2004-S. T., dated 17-9-2004 clarified that while the existing levy on tour operators engaged in operating tours in tourist vehicles remain as such, in case of a package tour (which are planned, scheduled, organized or arranged by tour operators), the scope of the levy is being extended by removing the limitations regarding transportation by tourist vehicle only which means it will include air-rail-cab travel also. From the above clarification, the intent of the legislature was to expand the 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-10-92004. 11. From the above discussions, we are of the considered opinion that the impugned activities carried out by the assessee will not attract the definition of Tour operator ' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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