Interpretation of Service Tax Liability for Vehicles with Drivers: 'Rent a Cab Operator' Scheme

The case involved the interpretation of service tax liability on vehicles provided with drivers for transport services under the Motor Vehicles Act and the 'rent a cab operator' scheme. The appellant's agreement with BSNL for providing vehicles with drivers led to a dispute over service tax. The Commissioner (Appeals) upheld the tax demand, but the appellant argued that the services did not fall under the 'rent a cab operator' scheme. The tribunal agreed, ruling that providing vehicles for journeys as needed, without continuous rental, did not qualify under the scheme. The appellant was granted a waiver of pre-deposit of tax and a stay of recovery pending final appeal disposal.

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Issues involved: Interpretation of service tax liability on vehicles provided with drivers for transport services u/s Motor Vehicles Act and 'rent a cab operator' scheme.

Summary:
1. The appellant entered into an agreement with BSNL to provide vehicles with drivers for transport services. The original authority demanded service tax on the amount received for the services rendered. The Commissioner (Appeals) affirmed the order.

2. The Ld. Consultant argued that providing vehicles with drivers for hire does not fall under the 'rent a cab operator' scheme. He cited Tribunal decisions supporting this argument.

3. The Ld. SDR contended that vehicles hired by BSNL for transporting officials fall under the 'rent a cab' scheme as per the Motor Vehicles Act definition of 'cab' as a vehicle for hire.

4. After reviewing the case records and submissions, it was found that providing vehicles for journeys as needed, without continuous rental, does not come under the 'rent a cab' scheme. The waiver of pre-deposit of tax demanded and stay of recovery was granted pending final appeal disposal.

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