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TMI Blog2008 (7) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... vice tax under Section 66 read with Section 65(105)(O) of the Finance Act, as contended by the Revenue or their activity was outside the purview of Rent-a-Cab operator scheme, as claimed by the Appellant. According to the Appellant, they were engaged only in giving their cabs on hire to their clients and this activity is not covered by the definition of Rent-a-Cab operator service, as given in Section 65(91) and hence they were not liable to pay any service tax. 2. Heard both sides. 2.1. Shri P.C. Jain, Advocate, the Ld. Counsel for the Appellant, made the following submissions: 1) During the period of dispute as per Section 65(91) of the Finance Act, 1994, Rent-a-Cab operator means "any person engaged in the business of renting of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IOC but was being paid for trips to various places and during those trips, the vehicles continued to be with transport operator and the transport operator was paid for each trip depending upon the distance, time, etc. as per rate sheet, this activity of the transport operator would not be covered by the rent-a-cab service and the service tax demand was not sustainable. (3) Taxi hiring scheme is governed by registration under Section 74 of the Motor Vehicle Act,1988, while rent-a-cab scheme is governed by Section 75 of the of the Motor Vehicle Act. The operators under taxi hiring scheme cannot give their vehicles on hire under rent-a-cab scheme and if they do so, they would be inviting punishment under the Motor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.2,36,832/- for period from 1.4.2000 to 31.3.03 by show cause notice dt.2.2.05. Both the show cause notices have been issued by invoking longer limitation period of five years and both of them are time barred, as the Department was very well aware of the activities of the appellant right from Nov-2000. This is clear from the fact that the Appellant vide letter dt.20.11.2000 to the Dy. Commissioner of Central Excise, Dehradun, had intimated him about his activity of giving his taxis on hire and had also emphasized that his activity is not covered by rent-a-cab scheme and does not attract any service tax and the Department acknowledging this letter had asked him vide letter dt.30.11.2000 to obtain service tax registration and pay servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from both the sides. The point of dispute in this case is whether giving cabs on higher on demand basis, for which the charges from the client are made on the basis of per k.m. rate, is covered by the definition of rent-a-cab scheme operator's service, as defined under Section 65 (91) of the Finance Act, 1994. The period of dispute is from 01/04/2000 to 31/03/04. According to the Appellant, the very words "rent a cab scheme operator" suggest that the owner of the cab temporarily parts with the possession of the vehicle for a consideration and during the period renting, the vehicle is at the disposal of his client and that this scheme would not cover when the service being provided to a client is a pure transport service for which the ve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licencing requirement, the basic character of the service would not change. From the perusal of rent a cab scheme, 1989 framed by Central Government under Motor Vehicle Act, 1988, it is clear that this scheme involves giving the cabs on rent to a client and during period of renting, the vehicle is at the disposal of the client. 5. Moreover, what is taxable is the activity of renting of cabs by a rent a cab scheme operator. Ordinary meaning of the words 'to rent' is allowing the use of something one owns in exchange for payment. Therefore the test for ascertaining whether an activity is covered by the entry "rent-a-cab operator's service" is as to whether it involves giving the cab, with or without driver, to a client for a cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssue during the period from 2000 to 2004. In view of this, the Appellant cannot be accused of suppression of facts with intent to evade the payment of service tax, even if he did not file the service tax returns. In view of this, only the normal limitation period under Section 73 (1) of the Finance Act, 1944 would be available to the Revenue for recovery of non-paid service tax, if any. 7. We, therefore, remand this matter to Commissioner, Central Excise (Appeals), Meerut I for (a) de novo adjudication on the point as to whether the Appellant's activity, on the basis of the criteria laid down in para 5 above, is covered by the definition of "rent a cab operator's service", and (b) if so, for quantifying the demand of service ..... X X X X Extracts X X X X X X X X Extracts X X X X
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