TMI Blog2019 (3) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... long as the fleet owner cannot use them for gainful deployment, by no stretch of imagination it can be said that effective control is with the fleet owner. Therefore, going through the terms of the agreement it is to be construed that effective control is transferred. Thus, it cannot be said that right of possession and effective control is retained with the fleet owner. Therefore, such supply of buses by the appellants to MSRTC & PMPML is in the nature of supply of tangible goods. Time limitation - Held that:- The appellants were arguing on different classifications of the service they have rendered. However, they have not come forward to pay service tax under any one of them. Therefore, the extended period is invocable. Penalty - Held that:- Looking in to the fact that the transaction was with public sector undertakings and there were different views on the issue, one need to take a lenient view as regards penalties by invoking the provisions of Section 80 - penalties set aside. Matter remanded back to the original authority to re-examine the classification of the service provided by the appellants - appeal allowed by way of remand. - APPEAL NO.ST/85708/14 & ST/86980 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied upon the judgment of the Mumbai Bench of the Tribunal in the case of Deepak Transport Bus (supra). The order passed by the jurisdictional CESTAT Bench is binding on the adjudicating authority. Therefore, the services undertaken by the appellant be considered as rent-a-cab scheme operator service under Section 65 (105) (o) and abatement from the taxable value as per the Notification No.1/2006-ST dated 01/03/2013 may kindly be allowed to the appellant. 2.2 The learned Counsel further submits that as there was no deliberate intention on the part of the appellant to evade payment of duty therefore, penalty should not be imposed. Learned Counsel has also relied upon the following cases to support his claim that services rendered by them fall under rent-a-cab services: i) Petronet LNG Ltd. 2016 (46) STR 513 (Tri-Del) ii) S.K. Kareemun 2016 (42) STR 988 (Tri-Bang) iii) Harjinder Singh 2014 (33) STR 437 (Tri-Del) 2.3 Learned Counsel for the appellants submits that as per Section 65 (105) (zzzzj), supply of tangible goods service to any person, by any other person in relation to supply of tangible goods including machinery, equipment and appliances for u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are required to follow the instructions of the authorities of MSRTC. 3. Learned Authorised Representative for the department has reiterated the findings of Order-in-original. 4. Heard both sides and perused the records of the case. 5. Ongoing through the agreement between MSRTC PMPML, it is seen that; i) Buses will be hired for a period of 3 years with assured 341 days ii) Buses will be operated approximately per day on monthly average basis at the rate of ₹ 18.00 for 550-599 KMs, ₹ 16.36 for 600-649 KMs and ₹ 16.21 for 650 and above KMs per day on monthly average basis. iii) MSRTC will provide Conductor with tickets. The Conductor of MSRTC shall collect charges. iv) The General Manager (Traffic) of MSRTC shall identify the routes on which hired bus shall be deployed. v) The fleet owner has to provide the bus with driver possessing valid driving licenses with his wages and other allowances. vi) The fleet owner shall keep the buses road worthy and clean. The fleet owner shall supply lubricants, oil, tyres and tubes, spare parts, etc. required for running of buses including maintenance of the buses at his own cost. vii) The fleet ow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the VAT is payable to the State Government. iv) The goods must be tangible. 5.2 The Commissioner further found that all the above essential ingredients are satisfied as follows: i) Risk or responsibility whether statutory or financial lies with notices ii) Intention to possess and full control of the buses remains with notices iii) After the operation hours the arrangement to park the buses remains with notices iv) Even if the buses are parked in the premises of the clients the same are parked at the sole risk of notices v) All liabilities whether accidental or arising out of statutory violations are on account of notices vi) Insurance of the vehicles is done by notices vii) Their clients do not have intention to possess the vehicles; and viii) No VAT is paid in the said transactions. 5.3. Primary issue to be looked into in this case is whether the appellants have transferred the right of possession and effective control. In terms of the contract, it is seen that the appellants are obliged to keep the bus in a good condition after the particular day s work with bus is over; they are also expected to look after the maintenance and service of the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he stay application of the appellants, vide final order dated 28/08/2014 have observed that the Hon ble Punjab Haryana high Court in the case of Kuldeep Singh Gill 2010-TIOL-436-HC-P-H-ST and Madras High Court in the case of Secretary Federation of Bus Operators Association of Tamil Nadu 2003-TIOL-33-HC-MAD-ST have followed the classification of running or hiring of bus or cab services under the category of rent-a-cab service. The bench did not accept the contentions of the learned Authorised Representative that the demand is for the period from April 2009 to March 2012 and during this period a new entry was created making supply of tangible goods for use as a taxable service. The bench observed that they did not find any changes made in the law necessitating a new classification. The new service of supply of tangible goods for use has not been carved out of rent-a-cab service . Therefore, the bench observed that the impugned demand classifying the service under the category of supply of tangible goods for use service is not prima facie sustainable in law. We also find that CESTAT Bangalore in the case of HM Shanthappa -2011-TIOL-1970 has expressed the opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded or to be provided: (o) to any person, by a rent-a-cab scheme operator in relation to the renting of a cab. After 2007, the definition of cab reads as under: Section 65(20) of Finance Act, 1994 : A cab means (i) a motor cab, or (ii) a maxi cab, or (iii) any motor vehicle constructed or adapted to carry more than 12 passengers excluding the driver, for hire or reward : Provided that the maxi cab referred to in sub-clause (ii) or motor vehicle referred to in sub-clause (iii) which is rented for use by an educational body imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre, shall not be included within the meaning of cab. According to Section 65(91) of Finance Act, 1994, rent a cab operator means any person engaged in the business of renting of cabs. According to definition of taxable service, any service provided or to be provided to any person by a rent-a-cab operator in relation to the renting of a cab. As can be seen from the definitions given above, prior to the year 2007, the rent-a-cab service was applicable only to cabs and maxi cabs. Finance Act, 1994 did not def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndependently of the rent-a-cab scheme envisaged in Motor Vehicles Act. 5.6.5 After 2007, the definition of rent-a-cab scheme for the purpose of levy of service tax was modified and under clause (iii) any motor vehicle constructed or adapted to carry more than 12 passengers excluding the driver was also included in the definition. Any Motor Vehicle which can carry more than 12 passengers is called as omnibus in the Motor Vehicles Act. The rent-a-cab scheme envisaged in Section 75 of Motor Vehicles Act does not cover both maxi cab, motor car and omnibus. Therefore even if we take a view that because the word cab prefixed by motor and maxi is still a cab and therefore the definition of rent-a-cab scheme of Motor Vehicles Act can be applied even if specific exclusion or inclusion is not made, after 2007 it becomes very clear that the intention of the law makers for the purpose of levy of service tax was not to follow rent-a-cab scheme envisaged in the Motor Vehicles Act. Therefore two views are possible regarding this issue prior to 1-6-2007 but not after 1-6-2007. 5.6.6 Therefore without considering the judicial precedents or decisions when we consider the legal pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the Rules for rent-a-cab scheme, words hire or reward have been used everywhere else. Therefore even under Motor Vehicles Act legislative intention is that rent and hire or reward are interchangeable. Therefore when we look at the definitions in the Motor Vehicles Act, the relevant provisions of the law and the provisions in Finance Act, 1994 the following conclusions emerge : i. The intention of the Legislature to apply provisions of Motor Vehicles Act relating to rent-a-cab scheme to Finance Act, 1994 is non-existent. ii. The words rent and hire have been used interchangeably. iii. By adding maxi cab and motor vehicles with capacity to carry more than 12 passengers, Finance Act, 1994 clearly deviates from the Motor Vehicles Act which makes rent-a-cab scheme applicable only to motor cab and motor cycles and does not even cover maxi cabs leave alone motor vehicles equivalent of omnibuses. iv. The fact that the definition includes provision for exclusion of certain type of rent-a-cab operations from the purview of service tax also shows that there is no intention to apply rent-a-cab scheme under Motor Vehicles Act to Finance Act, 1994. v. Prior to 1-6 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
