Vehicle supply on call basis held outside Rent-a-Cab service because exclusive possession and control were not transferred.

An arrangement for supplying vehicles on call under a rate schedule was not treated as Rent-a-Cab service because it did not transfer exclusive possession or control of the vehicles to the recipient. The vehicles were provided only when booked for local or outstation duties, and payment depended on actual running under the agreed rates. That factual structure distinguished the arrangement from term-based hiring where vehicles are placed at the hirer's disposal. On those facts, the service was held not liable to service tax as Rent-a-Cab service, and the Revenue's appeal failed.

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Issues: Whether the arrangement for supply of vehicles to the buyer on call basis under a rate schedule, without exclusive control of the vehicles being transferred, amounted to Rent-a-Cab service liable to service tax.

Analysis: The agreement showed that vehicles were to be provided within the stipulated time on booking for local duties and on suitable notice for outstation duties, with payment governed by a schedule of rates. The arrangement was not one of term-based hiring or transfer of exclusive possession and control of the vehicles to the recipient. The distinguishing feature was that the service was available only when called for, and liability arose on actual running of the vehicle under the agreed rate structure. On those facts, the case was different from an arrangement where vehicles are hired and placed at the disposal of the hirer as in a rent-a-cab transaction.

Conclusion: The arrangement did not constitute Rent-a-Cab service and did not attract service tax liability. The Revenue's appeal was dismissed.

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