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of <h1>Tribunal rules in favor of Tour Operator on service tax issue, penalties adjusted</h1> <h3>PRASANNA TRAVELS PVT LTD Versus COMMISSIONER OF C EX & ST, PUNE</h3> The Tribunal ruled in favor of the appellant regarding the taxability of services provided as a Tour Operator, setting aside the service tax demand as the ... Service Tax - Tour Operator services - Stage carriages can not be considered as tourist vehicles - If a person to be considered as a 'tour operator', he must be operating a tourist vehicle in terms of Section 2(43) of the Motor Vehicle Act read with Rule 128 of Central Motor Vehicle Rules - demand confirmed. Penalty related to non payment of service tax on mandap keeper reduced. Issues: Taxability of services provided by the appellant under the category of Tour Operator, confirmation of service tax under the category of Mandap Keeper, penalties imposed, and quantification of service tax under the category of Business Auxiliary Service.Analysis:1. The main issue in this case pertains to the taxability of services provided by the appellant under the category of Tour Operator. The appellant argued that their vehicles did not qualify as 'Tourist Vehicles' as per Section 65(115) of the Finance Act, 1994. The adjudicating authority confirmed the tax demand without specifying how the appellant's vehicles could be considered as tourist vehicles.2. The Tribunal waived the pre-deposit of amounts involved due to a similar issue being decided by the Division Bench of Tribunal, Ahmedabad. The key contention was whether the vehicles operated by the appellant met the criteria to be classified as tourist vehicles, as required under the law.3. The Tribunal examined the Motor Vehicle Act's definition of a tourist vehicle and noted that the vehicles operated by the appellant were registered as stage carriages, not tourist vehicles. The Tribunal referenced a similar case decided by the Ahmedabad bench, emphasizing the importance of vehicles conforming to the specifications under Rule 128 of the Central Motor Vehicle Rules to be classified as tourist vehicles.4. The Tribunal cited judgments from the Madras High Court and relevant legal provisions to support its decision. It concluded that the appellant was not operating tourist vehicles as per the defined criteria, leading to the setting aside of the service tax demand under the category of Tour Operator.5. Regarding the service tax under the Mandap Keeper category, the appellant did not challenge the demand, and the Tribunal upheld it. Penalties imposed on the appellant were set aside due to the finding that they were not liable under the Tour Operator category. A nominal penalty was imposed for non-payment of service tax under the Mandap Keeper category.6. The Tribunal left the issue of service tax under the Business Auxiliary Service category open for the Deputy Commissioner to decide on merits. The appeal was partly allowed, setting aside the service tax demand under the Tour Operator category and adjusting penalties accordingly.This detailed analysis of the judgment highlights the legal arguments, precedents, and ultimate decision made by the Tribunal on each issue raised in the case.
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