2007 (2) TMI 57 - AT - Service Tax

Court rules vehicles not tourist vehicles under Motor Vehicles Act, upholds Order-in-Appeal.

COMMISSIONER OF C. EX. & CUS., VADODARA-II Versus GANDHI TRAVELS

The High Court dismissed the Revenue's appeal challenging the Order-in-Appeal that certain vehicles operated by the respondent did not qualify as tourist ... Tour Operator – Revenue contended that activity of respondent are covered under “Tour Operator” – Authority after conforming the evidence declared the activity as a “Contract Carriage” and rejected the revenue contention Issues:Applicability of Service Tax under 'Tour Operator' category to vehicles operated by the respondent.Analysis:The appeal filed by the Revenue challenges the Order-in-Appeal which held that certain vehicles operated by the respondent do not qualify as tourist vehicles under the 'Tour Operator' category. The Revenue argues that the vehicles are 'contract carriages' engaged in tour operations, citing relevant case law. On the other hand, the respondents contend that the vehicles were not registered as tourist vehicles and do not meet the criteria under the Motor Vehicles Act and Central Motor Vehicles Rules. The primary issue is whether the vehicles in question meet the definition of a 'tourist vehicle' as per the legal provisions.The Motor Vehicles Act defines a 'tourist vehicle' as a contract carriage meeting specific specifications outlined in the Central Motor Vehicles Rules. The Commissioner (Appeals) based the decision on the evidence provided by the respondent, showing that the vehicles were certified as contract carriages but not as tourist vehicles. The Revenue failed to present contrary evidence. The judgment of the High Court of Madras emphasizes that for a person to be considered a tour operator, they must operate a tourist vehicle in accordance with the Motor Vehicles Act and Central Motor Vehicle Rules. The evidence indicates that the respondent's vehicles do not qualify as 'tourist vehicles' as required by law.Another judgment cited supports the respondent's case, stating that tourist permits are issued to operators with tourist vehicles in alignment with the Motor Vehicles Act and relevant rules. Since the respondent's vehicles were not operated as 'tourist vehicles' as defined by the law, the Commissioner (Appeals) correctly granted relief to the respondents. The judgment concludes that the appeal by the Revenue is dismissed, affirming the correctness of the Commissioner (Appeals) order based on the legal requirements for tour operators and tourist vehicles.