Appeal on Service Tax for Rent-a-Cab: Limitation Period Upheld, Demand Set Aside

The Tribunal partly allowed the appeal filed by M/s Sanghvi Travels regarding the demand and penalty on service tax for rent-a-cab services. The Tribunal favored the revenue on the merit of the issue but ruled in favor of the appellant on the limitation period. As a result, the demand beyond the limitation period was set aside, and the appeal was partly allowed. The judgment was delivered on 11.07.2018 by the Tribunal.

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Issues: Confirmation of demand and imposition of penalty regarding service tax on rent-a-cab services.

Analysis:
The appeal was filed by M/s Sanghvi Travels challenging the demand and penalty related to service tax. The appellant argued that they provide vehicles for transportation on a per kilometer or lump sum basis, contending it is not renting but hiring of vehicles. They cited the Tribunal's decision in the case of R.S. Travels and the High Court's decision in the case of Vijay Travels to support their stance. On the other hand, the respondent relied on the impugned order.

The Tribunal examined the issues addressed by the High Court in the case of Vijay Travels, which included whether the Rent-a-cab scheme operator covers all forms of transport, whether there was actual renting out of cabs, and if the Tribunal violated judicial discipline or jurisdiction. The High Court answered these questions, stating that some were in favor of the revenue and some in favor of the assessee.

Ultimately, the Tribunal found that the merit of the issue favored the revenue, but on the matter of limitation, it favored the appellant. Consequently, the demand beyond the limitation period was set aside, and the appeal was partly allowed based on this decision. The judgment was pronounced on 11.07.2018 by the Tribunal.

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