Contract carriage vehicles are not tourist vehicles unless statutory definitions and motor vehicle rules are satisfied.

A vehicle operating under a contract carriage permit is not treated as a tourist vehicle for tour operator service unless it satisfies the statutory definition under the Motor Vehicles Act, 1988 and the corresponding Central Motor Vehicle Rules, 1988. On that basis, the service tax demand attributable to the three vehicles was unsustainable because the permits showed they were not tourist vehicles. The Commissioner (Appeals) was correctly upheld, and the Revenue's challenge failed.

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Issues: Whether vehicles operating under contract carriage permits fell within the definition of tourist vehicles so as to attract service tax as tour operator service.

Analysis: The contract carriage permits showed that the three vehicles were not tourist vehicles. The definition of tourist vehicle under the Motor Vehicles Act, 1988 had to be read with the relevant Central Motor Vehicle Rules, 1988. On that basis, the Commissioner (Appeals) correctly held that service tax demand attributable to those three vehicles could not be sustained. The order also followed the same view taken in an identical matter.

Conclusion: The demand of service tax in respect of the three vehicles was not sustainable and the assessee succeeded on this issue.

Final Conclusion: The Revenue's challenge to the relief granted by the Commissioner (Appeals) failed, and the impugned order was left undisturbed.

Ratio Decidendi: A vehicle permitted and used as a contract carriage is not liable to be treated as a tourist vehicle for tour operator service unless it satisfies the statutory definition and the corresponding motor vehicle rules.

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