Conflicting classification of employee transport buses as tour operator service led to unconditional waiver of pre-deposit and stay.

Conflicting decisions on whether buses hired on contract for transporting employees on fixed routes fall within "tour operator" service justified interim relief. The Tribunal noted divergent authority on similar facts, including rulings treating the activity as outside service tax as well as orders requiring pre-deposit, and also noted that proceedings had been dropped in some identical matters. In light of this inconsistency and earlier stay orders granting similar relief, it held that the appellants had made out a case for unconditional waiver of pre-deposit, with recovery of service tax, interest and penalties stayed pending the appeals.

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Issues: Whether, in view of conflicting decisions on the classification of buses hired on contract basis as "tour operator" service, the appellants were entitled to unconditional waiver of pre-deposit and stay of recovery during pendency of the appeal.

Analysis: The demand arose from the allegation that providing buses on hire for transporting employees on fixed routes constituted "tour operator" service. The Tribunal noted that on similar facts various authorities had taken divergent views, including decisions where such activity was held not liable to service tax, as well as decisions directing pre-deposit. It also noted that in some identical matters the departmental authorities had themselves dropped proceedings. In these circumstances, and following the approach adopted in earlier stay orders where identical issues had been treated as fit for unconditional waiver, the Tribunal found that the appellants had made out a case for relief at the interim stage.

Conclusion: The appellants were entitled to unconditional waiver of pre-deposit, and recovery of service tax, interest and penalties was stayed during pendency of the appeals.

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