2009 (9) TMI 515 - AT - Service Tax

Tribunal rules in favor of appellant in Service Tax liability case on rent-a-cab services

SRI SAI KRISHNA TRAVELS Versus COMMISSIONER OF C. EX., VISAKHAPATNAM

The Tribunal ruled in favor of the appellant in the case concerning Service Tax liability on rent-a-cab services. The appellant's argument that they were ... Hiring out the cabs to their customers - Rent-a-cab service – demand of service tax – period of limitation - appellants are providing vehicle either owned by them or procured front others to their customers along with driver and fuel and charging their customers based upon kilometers traversed or upon the lump sum amount as has been agreed upon – Held that: - an identical issue has been decided by the Coordinate Bench in the case R.S.Travels (2008 -TMI - 30076 - CESTAT NEW DELHI) – decided in favor of assessee Issues:Service Tax liability on rent-a-cab service provided by the appellant.Analysis:The case involved an appeal against the Order-in-Appeal confirming a demand for Service Tax on rent-a-cab services provided by the appellant. The appellant had taken registration for the service, but evidence suggested they were providing the service before registration without discharging the tax liability. The authorities issued a show cause notice, which the appellant contested. The adjudicating authority confirmed the demand, and the first appellate authority upheld the decision, leading to the appeal.The appellant argued that they were providing vehicles along with driver and fuel based on kilometers traversed, not renting cabs. They contended that the show cause notice was time-barred due to earlier correspondence. The Department argued that the appellant was indeed hiring out cabs to customers, citing a precedent.The Tribunal examined the issue of whether the appellant was liable to pay Service Tax for hiring out cabs. The definition of 'rent-a-cab scheme operator' was crucial, emphasizing engagement in the business of renting cabs. Referring to a precedent, the Tribunal found in favor of the appellant, noting the lack of evidence in the Department's argument.Additionally, the Tribunal distinguished between decisions of a Single Member Bench and a Division Bench, giving precedence to the latter. Consequently, the Tribunal set aside the impugned order, allowing the appeal with any consequential relief. The judgment clarified the nature of the appellant's service and the applicability of Service Tax, ultimately ruling in favor of the appellant based on legal interpretations and precedents.