TaxTMI 
TaxTMI 
2017 (7) TMI 64
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....he appellant collected tax from service recipient but did not deposit the same into the treasury: (Amount in Rs.) Sr. No. Name of the Service recipient Gross amount involved Service tax collected Education cess collected Secondary Higher Education cess collected Total Tax collected 1 M/s. Secure Meters Ltd. Udaipur 11689916 576662 11537 5766 59396 2 M/S. Hindustan Zinc Ltd. Chanderiya Lead Zinc Smelter, Putholi, Chittorgarh 29828947 3579471 71588 34157 685216 4,15,18,863 41,56,133 83,125 39,923 42,79,181 3. Appellant rented its vehicles to the following concerns during the period 01.06.2007 to 31.03.2009 as is depicted by ld. Adjudicating authority in the Table at para 14 of the adjudication order dated 20.08.2011 as under but taxes realized from the recipient of service was not deposited into the treasury:- (Amount in Rs.) Sr. No. Name of the Service recipient Gross amount involved Service tax collected Education cess collected Secondary Higher Education cess collected Total Tax colle....
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....e operator" has been defined as a person, who is engaged in the renting of cabs. The words "in relation to", undoubtedly, do have the effect of expanding the scope of taxation. With this proposition, we can have no quarrel. But, this cannot detract from our enquiring into as to what is the transaction, which is actually brought to tax. We are constrained to pose this question and answer this question as what is sought to be taxed is the service in relation to the renting of cabs. So, the most important and crucial element, which we must bear in mind, is, whether there is a business of renting of cabs. Unless there is renting of cabs, there is no question of further enquiring as to the services, which may be rendered therein. In other words, any service, which may be rendered and which does not relate to renting of cabs, would be irrelevant for our consideration. When we consider the matter in the said light, we have no doubt in our minds that the Tribunal has, in this case, correctly propounded the principle that, unless the control of the vehicle is made over to the hirer and he is given possession for howsoever short a period, which the contract contemplates, to deal with the veh....
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....he licence informed of the movement of each vehicle, from time to time. (3) If a hirer so desires, he may engage a person possessing a valid driving licence to drive the vehicle so hired during the period of the hire agreement." [Emphasis supplied] 7. The assessee further submits that on examination of section 75 of the Motor Vehicle Act 1988, Hon'ble High Court in para 18 of the judgment has dealt with the implication of the scheme of renting of motor cabs. The said paragraph reads as under: "18. A perusal of Clause 10 would re-enforce us in the view that we are taking that, under the rent-a-cab scheme, the hirer is endowed with the freedom to take the vehicle, wherever he wishes, and he is only obliged to keep the holder of the licence informed of his movements from time to time. When a person chooses to hire a car, which is offered on the strength of a permit issued by the Motor Vehicles Department, then the owner of the vehicle, who may or may not be the driver, will offer his service while retaining the control and possession of the vehicle with himself. The customer is merely enabled to make use of the vehicle by travelling in the vehicle. In the case of ....
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....n in the Central Legislation, namely, Section 75 of the Motor Vehicles Act and also a scheme stood framed as early as in 1989. We are, therefore, of the view that, unless there is control, which is passed to the hirer under the rent-a-cab scheme, there cannot be a taxable transaction under Section 65(105)(o), read with Section 65(91) of the Service Tax Act." [Emphasis supplied] 8. The assessee submits that according to Hon'ble High Court of Uttarakhand when a customer chooses to hire a car which is offered under Motor Vehicle Act, the control and possession of the vehicle remains with the owner of the vehicle and the customer is a mere user thereof as a passenger. He pays the charges as per meter. But in a renting scheme, the hirer has freedom to use vehicle as he pleases and he must have a possession and control over the vehicle. This is a fundamental distinction between the rent a cab and hiring. In the case of hiring, the owner of the vehicle retains the control and possession; he either drives the vehicle himself or employs somebody else to drive the vehicle; and the customer merely makes use of the vehicle by traveling in the vehicle on the basis of a contract that he will ....
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....ith the terms and condition and consideration, it was pure case of renting a cab. The motor vehicle had capacity of carrying more than 12 passengers and rented to different public sector and companies for their own use having the control over the vehicles. 12. According to Revenue what is concerned for levy is that services provided in relation to renting of a cab is taxable. No doubt there are two judgments from two different Hon'ble High Courts but the fundamental concept of taxing provision is to tax the services provided relating to the renting of the cab. The Ld. adjudicating authority has rightly adjudicated the matter. 13. So far as the time bar is concerned according to Revenue, plea of confusion is not bonafide since the assessee collected the tax but did not pay the same to the Treasury. Therefore, there is no confusion of bonafide or time bar. Proceeding was initiated when intention to evade service tax is noticed by such modus operandi. Ld. Adjudicating authority has granted abatement without examining facts and circumstances of the case. Therefore, impugned order on that account should be reversed. At this juncture assessee says that abatement is available to it.....