Tour operator service tax applies only to tourist vehicles used for operating tours, not to contract carriage permits alone.

Liability to service tax as a tour operator arises only where the operator uses a vehicle that satisfies the statutory definition of a tourist vehicle and actually operates tours within the defined service. Mere possession of a contract carriage permit is not enough, because the permit alone does not establish that the vehicle falls within the tour operator category under the Motor Vehicles Act-based scheme. The Tribunal followed earlier consistent decisions and accepted that the Revenue had not shown any infirmity in the finding that the vehicles were not proved to be tourist vehicles. On that basis, the demand was held unsustainable.

---

---

Issues: Whether a person holding a contract carriage permit, without proof that the vehicle satisfies the requirements of a tourist vehicle and is used for operating tours, is liable to service tax as a tour operator.

Analysis: The applicable statutory scheme required the person to be engaged in operating tours in a tourist vehicle covered by a permit under the Motor Vehicles Act, 1988. Mere possession of a contract carriage permit was not enough by itself. The vehicle had to answer the statutory description of a tourist vehicle, and the service had to fall within the defined ambit of tour operator service. The Revenue failed to produce material showing infirmity in the Commissioner's finding that the vehicles were not shown to be tourist vehicles merely because they had contract carriage permits. The issue was also covered by earlier consistent Tribunal decisions followed in the matter.

Conclusion: Mere holding of a contract carriage permit does not, by itself, make the operator liable as a tour operator for service tax.

Final Conclusion: The demand was unsustainable on the facts and law applied, and the assessee's position prevailed.

Ratio Decidendi: Liability to tour operator service arises only when the operator uses a vehicle that satisfies the statutory definition of a tourist vehicle and operates tours within the defined service; a contract carriage permit alone is insufficient.

---