Tour Operator service tax depends on use of a tourist vehicle; private service vehicles fall outside the levy.

Service tax under the Tour Operator category applied only where the assessee operated tours in a tourist vehicle within the meaning of the Motor Vehicles Act and the Central Motor Vehicles Rules. The article notes that the 2004 amendment expanded the scope only for package tour operators, not for all tour operators. On the stated facts, the vehicle was treated as a private service vehicle rather than a tourist vehicle, and the registration and permit records supported that classification. The departmental view that the amended definition removed the tourist vehicle requirement for all operators was rejected, so the demand for service tax, interest, and penalties was unsustainable.

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Issues: Whether service tax under the category of Tour Operator was leviable where the vehicle used was not a tourist vehicle within the meaning of the Motor Vehicles Act and the Central Motor Vehicles Rules.

Analysis: The liability under Section 65(115) of the Finance Act, 1994 depended on the assessee being engaged in operating tours in a tourist vehicle. The definition of tourist vehicle under Section 2(43) of the Motor Vehicles Act, 1988 read with Rule 128 of the Central Motor Vehicles Rules, 1989 remained material to the levy, except that the 2004 amendment expanded the scope only for package tour operators. The vehicle in question was treated as a private service vehicle and not as a tourist vehicle, and the available vehicle registration and permit particulars supported that position. The reasoning in the cited decisions on the requirement of a tourist vehicle was applied to the facts, and the departmental view that the amended definition removed that requirement for all tour operators was rejected.

Conclusion: The demand of service tax, interest, and penalties was not sustainable because the assessee was not using a tourist vehicle and therefore did not fall within the taxable category of Tour Operator on the facts of the case.

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