2016 (4) TMI 66 - AT - Service Tax

Appellants' Educational Tour Services Exempted under Tour Operator Rule

The Tribunal affirmed that the services provided by the appellants were exempted under the tour operator service due to the educational nature of the ... Tour Operator service - Rent-a-Cab service - exclusion of journeys organised for educational bodies - service tax liabilityTour Operator service - Rent-a-Cab service - exclusion of journeys organised for educational bodies - Whether the services provided by the appellant fall within Tour Operator or Rent-a-Cab services and whether they are excluded from levy as journeys organised or arranged for use by educational bodies - HELD THAT: - The Commissioner (Appeals) found on the basis of details submitted by the appellant that the vehicles were hired by schools and colleges for trips. The statutory definitions of 'tour operator' and 'cab' contain an express exclusion: journeys organised or arranged for use by an educational body (other than a commercial training or coaching centre) are not covered. Revenue did not controvert the factual finding that the hires were for educational trips. In view of the express exclusion in the definitions and the unchallenged factual finding, the services cannot be subjected to service tax under the cited categories. [Paras 3]The Commissioner's finding that the services are excluded from Tour Operator and Rent-a-Cab service levy because they were organised for educational bodies is upheld; the Revenue's appeals are dismissed.Final Conclusion: The impugned order of the Commissioner (Appeals) is upheld; Revenue's appeals are dismissed as the services in question fall within the exclusion for journeys organised or arranged for educational bodies and the factual finding to that effect was not controverted. Issues:1. Whether the services provided by the appellants fall under Rent-a-Cab service or Tour Operator service.2. Whether the educational trips organized by schools are exempted from the purview of tour operator service.Analysis:1. The case involved an appeal by the Revenue against an Order-in-Appeal confirming service tax liability on the services provided by the appellants, who offered buses for hire on a contract basis. The Adjudicating Authority held that the services fell under Rent-a-Cab service as per Section 65(20) of the Finance Act. The Commissioner (Appeals) disagreed, classifying the services under Tour Operator service as per Section 65(115), noting that the vehicles were engaged in tours. The Revenue challenged this classification, arguing that the Commissioner did not explain how the services fit under tour operator service.2. The Tribunal examined the definitions of 'cab' and 'tour operator' under the Finance Act. It was noted that under the definition of 'cab,' vehicles rented for use by educational bodies imparting skill or knowledge are excluded. The definition of 'tour operator' explicitly excludes journeys organized for educational bodies other than commercial training centers. The Commissioner (Appeals) found that the vehicles were hired by schools for educational trips, a fact not disputed by the Revenue. Consequently, the Tribunal upheld the Commissioner's decision, dismissing the Revenue's appeals.In conclusion, the Tribunal affirmed that the services provided by the appellants were exempted under the tour operator service due to the educational nature of the trips organized by schools. The judgment highlights the importance of understanding and applying the definitions and exclusions provided under the relevant legal provisions to determine the tax liability accurately.