AI Drafter 
TaxTMI 
TaxTMI 
2017 (11) TMI 773
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....nt-a-Cab" services. Show cause notices were issued to all these appellants demanding differential service tax liabilities of various periods alongwith interest thereon and also proposing imposition of penalties under various provisions of law. Adjudicating authority confirmed the demands of service tax alongwith interest and penalties. In appeal, lower appellate authority vide order in appeals (OIA impugned orders), upheld orders of adjudicating authority. Hence these appeals. 2. Details of appeal numbers, period involved, tax demanded etc. as submitted by Ld. Advocate is reproduced below for ready reference S.No. Appeal No. Appellant Period involved Service Tax demanded 1. ST/01886/2012 APSRTC-Kadapa 01.6.2007- 30.09.2009 2,715,551.00 2. ST/25921/2013 APSRTC-Kadapa 01.10.2009-30.11.2010 2,259,456.00 3. ST/22292/2015 APSRTC-Bhimavaram 01.06.2007-31.12.2011 376,172.00 4. ST/30095/2016 APSRTC-Tanuku 01.6.2007 - 31.12.2011 234,089.00 5. ST/30096/2016 APSRTC-Narasapuram Jan.2012-Mar. 2013 86,989.00 6. ST/30097/2016 APSRTC-Tadepalligudem Jan. 2012-June 2012 39,172.00 7. ST/3....
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....on 65 B (44) of the Finance Act, 1994, post introduction of negative list based levy of service tax. (b) It has been held that the levy of service tax under rent a cab would be attracted, only when the possession and control of the vehicle is also given away to the person to whom the vehicle is given. In the instant case, the possession and control of the vehicles always remain with APSRTC and hence the demand of service tax under rent a cab operator service is not sustainable. (c) From 01.07.2012, a negative list based service tax levy was imposed and the term "service" has been defined in Section 65 B (44) of the Act and all services, other than those mentioned in the negative list or exempted from payment of service tax are liable to levy of service tax. (d) Section 66 D of the Act, containing the negative list covers the following, during the relevant period. Service of transportation of passengers, with or without accompanied belongings by- (i) A stage carriage; (ii) Railways in a class other than- (A) First class; or (B) An airconditioned coach; (iii) Metro, monorail or tramway; (iv) Inland waterways; ....
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....ssioner of CEX, CUS & S. Tax, Hyderabad-III (2016(42)STR 988(Tri-Bang); Shri Gayatri Turist Bus Services Vs. Commissioner of Central Excise, Vadodara (2013 (29) STR 499 (Tri.-Ahmd.) (b) M/s Vishal Enterprises Vs. Commissioner of Central Excise, Mysore (2013(31)STR 319(Tri.-Bang) (c) M/s Anil Engineering Vs. Commissioner of CE, Jaipur (2014(34)STR 44 (Tri.-Del); (d) M/s Carzonrent (India) Pvt. Ltd. Vs. Commissioner of Service Tax, Delhi-I (2017(50)STR 172 (Tri.-Del.); (e) M/s Lawrence Travels Vs. CCE, Nashik (2013(32)STR 715 (Tri.-Mumbai). (f) M/s Neeraj Constructions Vs. CCE, Jaipur (2009(13)STR 145 (Tri.-Del.). 6. Heard both sides and have gone through the facts of the case. Rent-a-cab service was brought into Service Tax net w.e.f. 16.09.1997. Section 65 (41) (r) defining the service as taxable service as "any service provided to any person by renting cab operator in relation to renting of a cab". Erstwhile vide section 65(32), "rent-a-cab operator" was defined as "person who is the holder of a licence under Rent-a-Cab scheme, 1989, framed by Central Government under Motor Vehicles Act, 1988". These provisions were amended a number of times. As it stood as subst....
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....gh Court of Uttarakhand in the landmark decision of CCE Vs. Sachin Malhotra (supra). The Hon'ble High Court in their judgment unequivocally held that unless controlling of vehicle is made over to hirer and he is given possession for howsoever short period to deal with the vehicle, there would be no renting. The relevant portions of the judgment are reproduced as under: "What is sought to be taxed under the provisions, which we have adverted to in this judgment, is service, which is rendered in relation to renting of cabs. Under Section 65(91) of the Service Tax Act, "rent-a-cab scheme 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....
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....contemplates collection of hire charges. It also provides for the duties and responsibilities of the hirers of motor cabs in Clause 10, which we consider to be relevant, and we, therefore, extract the same as under : "10. Duties and responsibilities of hirers of motor cabs. - (1) It shall be the duty of every hirer, to keep the holder of the licence informed of his movements from time to time. (2) If an individual or company has hired the vehicles as a leader of the tourist party, it shall be the duty of such leader of the party to keep the holder of the 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." 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 t....
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....for the appellant that the Court must ignore the provisions of Section 75 of the Motor Vehicles Act. We are of the view that, when the lawgiver introduced this new source of taxation, it must be treated as having been aware of the distinct concept of renting a cab for which there is provision 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. 9. The ratio of Sachin Malhotra judgment was followed by Hon'ble High Court of Uttarakhand in their subsequent judgment in the case of Commissioner of Customs & Cx Meerut Vs. R.S. Travels, where the Hon'ble High Court reiterated that when there is only a contract of hire and there is no renting of cab, there is no question of assessee being assessed in respect of services rendered in connection with rent-a-cab service. The above judgments of Hon'ble High Court have been followed by the Tribunal in the following cases: (a) CCE Vs P.B. Bo....