2017 (6) TMI 720

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... upheld the original order. 2. The Ld. Counsel for the appellant submitted that the appellants are not engaged in providing taxable service as a rent-a-cab operator. They are providing vehicle to the client which continues to be in their control and the charges are collected on per kilometer basis. She relied on the decision of Hon'ble Uttarakhand High Court in Sachin Malholtra 2015 (37) STR 684, to submit that there is distinction between 'hiring' and 'renting' of vehicles. In the present case, the appellant is only hiring out their vehicle and not renting it, as they continue to have control on the vehicle. 3. The Ld. Counsel also submitted that the lower authorities did not consider the abatement available to the appellant in terms of Notification 1/2006 dated 01.03.2006 and also did not examine the threshold turnover limit for small scale service provider upto 8 lakhs/ 10 lakhs as applicable during the relevant time. 4. We have heard both the sides and perused the appeal records. 5. There is no written agreement available to examine the scope of transaction carried out by the appellant with the clients. Rent a cab service is liable to service tax in terms of Section 65 (105....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....xed with the client and control of the vehicle always remains with the cab operator/driver, he is providing transport service and this activity would be outside the purview of the entry - 'rent-a-cab operator's service'. 16. The Delhi Tribunal in case of Kuldip Singh Gill v. Commissioner of Central Excise, Jalandhar, reported in 2006 (3) S.T.R. 689, was examining the issue where the public sector undertaking had appointed the appellant as a contractor for providing transport to its employees as and when required at the fixed places against payment on kilometer basis. The contract was clear that the public sector undertaking was not renting out any particular number of vehicles, but, was making payment for operating trips to various places. The vehicle continued to remain with the appellant only and whenever the trips were required to be made, the appellant was asked to carry out the same and he was paid per trip depending upon distance, time, etc. as per the rate sheet. The Tribunal, on taking note of the fact and taxing provisions of the Act, held that it was providing a transport service and was not amounting to a renting of a cab. The Punjab & Haryana High Court, later on, r....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ection 65(52) of the Finance Act and Rent-a-Cab Scheme Operator under Section 65(38) of the Finance Act and dealt with each category separately. Under the heading "maxi car" or "motor car", it discussed various aspects/legal provisions and held thus : "(45) We will not consider the writ petition in case of the persons or organizations that are "motor cab owners" or "maxi cab operators." (46) Common arguments were addressed by Mrs. Nalini Chidambaram, learned Senior Counsel, Mrs. Radha Gopalan and Mr. D. Palani, learned Counsel in respect of this category. This permit for plying the motor cab is also covered under Section 74 of the Motor Vehicles Act, which is the provision for grant of "contract carriage permit". The provisions of Sub-sections (v), (vii) and (viii) of Section 74 of the Motor Vehicles Act speak about the "motor cab permits". The term "cab" is already defined vide Section 65(9) of the Finance Act meaning a "motor cab" or a "maxi cab". While the definition of "maxi cab" has been literally lifted from Section 2(22) of the Motor Vehicles Act so also the definition of "motor cab" has been lifted from Section 2(25) of the Motor Vehicles Act. (47) The most importan....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

...."tourist vehicles". The learned Counsel addressed us in relation to Section 65(50), (51) and (52) of the Finance Act. (50) We have already shown that every "motor cab" or "maxi cab" is a "contract carriage" and would certainly come under the definition of Section 2(43) of "tourist vehicle" as it is required to be constructed, adapted and maintained under the Motor Vehicles Act and the Rules framed thereunder as a "tourist vehicle". If any person uses such a vehicle in the business of operating tours then, certainly, such a person would be a "tour operator" and would come under the dragnet of the Finance Act under Section 65(52). (51) However, in our opinion, the provisions of Section 65(48)(o) read with Section 66(3) of the Finance Act are extremely relevant and under any circumstances would cover the persons like petitioners. Under those provisions, there is no necessity whatever of having any "tourist permit" as such and it is enough if a person is engaged in the business of renting of motor cabs or maxi cabs. (52) It was further tried to be argued that number of petitioners did not have a licence or a permit under Rent-a-cab Scheme, 1989 under the Motor Vehicles Act. Th....