Service tax on contract carriages failed where no prima facie case was shown to disturb the appellate relief.

Service tax demand on contract carriages operating on inter-State and intra-State routes was set aside because the buses were treated as not requiring a separate licence and not falling within the definition of a tourist vehicle under Section 2(43) of the Motor Vehicles Act and Rule 128 of the Central Motor Vehicles Rules. In stay proceedings, the Tribunal held that the Revenue had not established a prima facie case to interfere with the appellate order. The request for stay was therefore rejected.

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Issues: Whether the Revenue had made out a prima facie case for grant of stay against the order setting aside the service tax demand on contract carriages plying inter-State and intra-State routes.

Analysis: The order under challenge proceeded on the footing that the buses did not require a separate licence and did not fall within the definition of a tourist vehicle under Section 2(43) of the Motor Vehicles Act and Rule 128 of the Central Motor Vehicles Rules. The Tribunal noted that the Revenue had not been able to establish a prima facie case to justify interference with the appellate order for the purpose of stay.

Conclusion: The request for stay was not justified and the stay petitions were rejected.

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