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of <h1>Appellant wins appeal over service tax liability under Rent-a-Cab scheme, control transfer pivotal.</h1> The Tribunal ruled in favor of the appellant, setting aside the penalty and rejecting the Revenue's appeal. The decision hinged on the interpretation that ... Demand of service tax - renting of cab without transferring control - whether levy of service tax under new category would mean that it was not taxable earlier - whether the appellant-asessee who was entered into a contract of hiring of vehicles falls under the category of 'Rent-a-Cab scheme operator' is liable for service tax under the category of 'Rent-a-Cab Service' or otherwise - Held that:- Judgement of the Hon'ble High Court of Uttrakhand in the case of Sachin Malhotra (2014 (10) TMI 816 - UTTARAKHAND HIGH COURT) is specifically on the issue. We note that Hon'ble High Court was called on to decide the question of law on the issue whether hiring of vehicles would fall under the category of Rent-a-cab scheme operator' or otherwise - Tribunal did take a view against the assessee but the Tribunal's judgement [2013 (7) TMI 816 - CESTAT NEW DELHI] was delivered on 02.05.2013 while the judgement of the Hon'ble High Court of Uttrakhand was delivered on 06.08.2014. Further, we notice that the Hon'ble High Court of Uttarakhand in the said judgement has distinguished the judgement of the Hon'ble Madras High Court in the case of Secy. Federn of Bus-operators Assn. of Tamil Nadu [2001 (4) TMI 7 - MADRAS HIGH COURT]as well as the judgement of the Hon'ble High Court of Delhi in the case of Kuldip Singh Gill [2005 (5) TMI 353 - CESTAT, NEW DELHI]. This judgement of the High Court of Uttarakhand being a recent one we follow the same and hold that the impugned order is unsustainable and liable to be set aside on merits itself. When the lawgiver introduced this new source of taxation, it must be treated as having been aware of the distinct concept of renting a cab for which there is provision in the Central Legislation, namely, Section 75 of the Motor Vehicles Act and also a scheme stood framed as early as in 1989. We are, therefore, of the view that, unless there is control, which is passed to the hirer under the rent-a-cab scheme, there cannot be a taxable transaction under Section 65(105)(o), read with Section 65(91) of the Service Tax Act - Decided against Revenue. Issues Involved:1. Appeal filed by Revenue against setting aside penalty.2. Appellant challenging the order on merits.3. Whether appellant-asessee under a hiring contract falls under 'Rent-a-Cab scheme operator' liable for service tax.Analysis:1. The Revenue appealed against the penalty being set aside, while the appellant challenged the order on its merits. The central issue revolved around determining the service tax liability of the appellant-asessee under a hiring contract, specifically whether they fell under the category of 'Rent-a-Cab scheme operator' for service tax purposes.2. The appellant argued that their contract with Bharat Sanchar Nigam Ltd. for supplying vehicles on a hiring basis did not attract service tax liability. They cited judgments from the Hon'ble High Court of Uttarakhand to support their position, emphasizing that the control and possession of the vehicles remained with the owner, thus not constituting a taxable transaction under the relevant provisions.3. In contrast, the Revenue contended that previous tribunal judgments and decisions from the Hon'ble High Courts of Madras and Delhi supported the imposition of service tax on hiring vehicles under the Rent-a-Cab service category. They argued that control passing to the hirer was a crucial factor, distinguishing between hiring and Rent-a-Cab schemes, thereby establishing service tax liability.4. The Tribunal analyzed the conflicting viewpoints and highlighted the recent judgment by the Hon'ble High Court of Uttarakhand, which differentiated and overruled previous decisions cited by the Revenue. The Tribunal aligned with the recent judgment, emphasizing the importance of control passing to the hirer under the Rent-a-Cab scheme to trigger service tax liability.5. Ultimately, the Tribunal ruled in favor of the appellant, allowing their appeal, and rejected the Revenue's appeal. The decision was based on the recent judgment's interpretation and application, setting aside the earlier order on its merits due to the unsustainable nature of the impugned decision.In conclusion, the judgment clarified the service tax liability concerning hiring of vehicles under the Rent-a-Cab scheme operator category, emphasizing the significance of control passing to the hirer as a determining factor. The decision underscored the importance of recent judicial interpretations in resolving conflicting views and upholding the appellant's position based on the latest legal precedent.
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