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Anil Kumar Agnihotri Versus Commissioner, Cental Excise Kanpur

2018 (1) TMI 171 - ALLAHABAD HIGH COURT

Rent a cab services - distinction between 'renting' and 'hiring' - appellant pleaded that he is not renting the cabs to GAIL rather the GAIL is hiring cabs for its use from the appellant - whether such a distinction between 'renting' and 'hiring' is necessary for deciding the taxibility of the above service? - Held that: - what is sought to be taxed under the Act is the service provided by a person under a rent-a-cab scheme. It makes no distinction between renting or hiring. The two terms have n .....

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rendered by him would fall within the taxable service as defined under Section 65 (105) (o) of the Act and is chargeable to tax under Section 66 of the Act. - The “rent-a-cab scheme” 1989 formulated by the Central Government in exercise of powers under Section 75 of the Motor Vehicles Act, 1988 providing for obtaining a licence by the operator of the scheme has nothing to do with the provisions relating to the imposition/chargebility of service tax. Therefore notwithstanding the above scheme .....

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l for the Central Excise Department. This is an appeal under Section 35-G of the Central Excise Act, 1994 against the order of the Customs and Excise and Service Tax Appellate Tribunal, New Delhi dated 2.5.2013 whereby the appeal of the appellant/assessee has been dismissed. The appellant is running a travelling agency in the name of M/s. Jai Santoshi Maa Travellers as a sole proprietor. It provides vehicles to customer on rent/hiring and one of the major customers happens to be Gas Authority of .....

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f the various terms and conditions of the said agreement reveals that the control of vehicle remains with the appellant though it is used by the GAIL and that all the responsibilities and liabilities in connection with the use of the said vehicle would be that of the appellant. The appellant received a show cause cum demand notice as to why an amount of ₹ 5,12,040/- as service tax at the rate of 5% may not be charged and realized from him for renting the vehicles to the GAIL for the period .....

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this appeal preferred by the appellant the following substantial question of law is projected for consideration by the Court:- i) Whether the facility of motor cab provided by the appellant to the GAIL under the terms and conditions of the agreement as referred to above would fall within the taxable services as defined under Section 65(105) (0) of the Finance Act and is chargeable to service tax? There was no tax on 'services' and the goods manufactured alone were taxable despite the fa .....

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thdrawn and such service was covered within the charging Section 66 of the Finance Act. The relevant provisions of the Finance Act are reproduced herein below:- Definitions. 65. In this Chapter, unless the content otherwise requires.- …............... …................ 105 taxable service means any service provided or to be provided; ..…............. …............... (o) to any person, by a rent-a-cab scheme operator in relation to the renting of a cab; Section 66 of .....

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(5) CTC 547 a Division Bench of the Madras High Court in construing the above provisions of the Act vis-a-vis Section 74/74 of the Motor Vehicles Act held that if the petitioners are plying maxi cabs or a motor cabs and giving the services in relation to the renting of a motor cab or a maxi cab, then they would be in the tax net and can not complain that they are not covered by the Finance Act. The Court observed as under:- We have, therefore, no hesitation in holding that if the petitioners ar .....

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t and the rent-a-cab scheme 1989 of the Government carved out a distinction between a rent-a-cab and hiring of a cab and held that both renting and hiring of a cab are significantly two different transactions and that in the case of renting the hirer has freedom to use the vehicle as pleases to him which undoubtedly implies that he must have possession and control over the vehicle which is not the case of simple hiring. Thus, where the possession and control does not passes to the hirer, the ser .....

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