Tour operator tax liability depends on use of a tourist vehicle with the required permit; demand failed on contrary factual findings.

Liability as a tour operator arises only where tours are operated in a tourist vehicle covered by the requisite permit under the Motor Vehicles Act and rules. On the facts found, the vehicles used by the respondent were outside the statutory definition of tourist vehicle, supported by the transport authority certificate, and the Revenue produced no contrary evidence to dislodge that finding. Reliance on only one clause of Rule 128 could not override the statutory requirement. The activity was therefore not taxable as tour operator service, and the service tax demand and penalty were not sustainable.

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Issues: Whether the respondent's activity fell within the definition of a tour operator so as to attract service tax, when the vehicles used were found to be outside the definition of tourist vehicle and no tourist permit was shown.

Analysis: The definition of tour operator required operation of tours in a tourist vehicle covered by a permit under the Motor Vehicles Act, 1988 or the rules made thereunder. The appellate authority relied on the Regional Transport Authority certificate and the statutory definitions to hold that the vehicles used by the respondent were outside the purview of tourist vehicle. The Revenue did not produce evidence to dislodge that finding or challenge the certificate. The adjudicating authority's reliance on only one clause of Rule 128 was insufficient to override the finding that the vehicles did not satisfy the statutory requirement. Once the vehicles were held not to be tourist vehicles, the cited High Court decision on tourist permit requirement did not assist the Revenue.

Conclusion: The respondent's activity was not liable to be treated as service of a tour operator on the facts found, and the service tax demand and penalty could not be sustained.

Ratio Decidendi: Liability as a tour operator arises only when tours are operated in a tourist vehicle covered by the requisite permit, and a finding that the vehicle is outside that statutory definition defeats the tax demand in the absence of contrary evidence.

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