TaxTMI 
TaxTMI 
TaxTMI 
2019 (3) TMI 874
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....03-Com-025-13-14 dated 21/11/2013, wherein, the Commissioner has confirmed a duty of Rs. 1,10,24,2018/- on the appellant No.1 and a duty of Rs. 9,02,233/- on the 2nd appellant, for the period April 2009 to March 2012, and imposed equal penalty under Section 78 of the Finance Act, 1994 and also imposed penalty under Section 77 of the Finance Act, 1944. 2. The appellant submitted that MSRTC & PMPML are providing a sovereign function and therefore, it is exempted from service tax in terms of Circular No.89/7/2006-Service Tax dated 18/12/2006. The appellant submitted that MSRTC & PMPML are operated buses under "State Carriage Permit" for public transport. The services provided by MSRTC & PMPML fall under the definition of "Tour Operator Service" as defined under 65 (120) (115) & 65 (105) (n) of Finance Act, 1994. The appellants activity comes under "Rent-a-cab scheme operator service" under Section 65 (91) of the Finance Act, 1994 as held by the following cases: i) Deepak Transport Bus Service - 2012-TIOL-560-CESTAT-MUM ii) Shri H.M. Shanthappa - 2011-TIOL-1970-CESTAT-Bang iii) Speedway Carriers Pvt. Ltd. - (stay Order No.ST/S/525/12/Cus 2.1 The appellant further submits that t....
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.... plain language of the state - viz. a "transfer of the right to use" and not merely a license to use the goods; Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others". 2.4 He also submits that in terms of CBEC Circular No.334/01/2008-TRU dated 29/02/2008 in case of transfer of right to use along with possession and effective control, VAT is payable and no service tax needs to be discharged. He submits that therefore, it is beyond any doubt that the category, viz., supply of tangible goods service covers supply of goods for use without transferring right of possession and effective control over such goods. In the instant case, the buses are effectively under the control of MSRTC and in terms of the agreement: a) In every bus, MSRTC is appointing a conductor and such conductor is to collect fares from the passengers. The bus is run under the command and control of the conductor. He decides and indicates when and where the bus would stop and go. b) It is the right of MSRTC to specify the bus specifications as to its door, flooring, curtains, seats and colour. MSRTC has the rig....
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....he fleet owner for a personal use or again of any other business during the contract period of the MSRTC. 5.1 We find that other agreements are also similar in nature. The brief issue to be decided in this appeal is to decide whether the activity of providing services on hire by the appellant to MSRTC & PMPML would fall under the category of "supply of tangible goods service" or alternatively it can be classified as rent-a-cab service as claimed by the appellants. We find that a show-cause notice has been issued to the appellants classifying the services rendered by them as "supply of tangible goods service". The learned Commissioner has held that the services provided by the appellants is supply of tangible goods. The Commissioner points that the definition of tangible goods service is an inclusive definition and not an exclusive definition. Therefore, the goods mentioned therein are not exhaustive. The essential ingredients required to be satisfied for classification of activity into supply of tangible goods service are following: i) The supplied material shall be goods as defined under Section 2 (7) of the Sale of Goods Act, 1930, read with Section 65 (50) of the Act. ii) The....
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....e right of possession, if any, envisaged in terms of the contract is only for the proper up keep and maintenance of the vehicle and not for using the same for any benefits to him. This is more in the nature of responsibility rather than right. In our standing, the right of possession and effective control should entail in the gainful use or deployment of buses by the fleet owner during the time, in which they are not plying for the purpose of MSRTC during the period of contract. As long as the fleet owner cannot use them for gainful deployment, by no stretch of imagination it can be said that effective control is with the fleet owner. Therefore, going through the terms of the agreement it is to be construed that effective control is transferred. Therefore, we of the opinion that and such circumstances it cannot be said that right of possession and effective control is retained with the fleet owner. Therefore, such supply of buses by the appellants to MSRTC & PMPML is in the nature of supply of tangible goods. 6. Learned Counsel for the appellant has submitted that in view of the Tribunal judgment, the services rendered by them would better fall under the category of rent-a-cab ser....
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....r stand relying on the decision of Punjab & Haryana High Court in the case of Kuldeep Singh Gill case (supra) and Madras High Court in the case of Secretary Federation of Bus Operators Association (supra). 8. We further find that in the case of S.K. Kareemun - 2016 (42) STR 988 T-B have taken a stand that the providing buses on hire to APSRTC comes under the ambit of rent a cab service under Section 65 (91) and 65 (105) (o) of Finance Act, 1994. The facts of the case are very much similar to the impugned case before us. In this case the Tribunal has also discussed the other options like 'Tour Operators' etc but came to the conclusion that the activity of giving buses on Hire to Road Transport Corporations falls under Section 65 (91) and 65 (105) (o) of Finance Act, 1994. Relevant findings of the coordinate Bench in the case of S.K. Kareemun (supra) are as under. 5.6.2. The definition of rent-a-cab scheme and definition of relevant expressions before 2007 in the Finance Act, 1994 were as under: "According to Section 65(20) "cab" means a motor cab or maxi cab. 65(91) "rent-a-cab scheme operator" means any person engaged in the business of renting of cabs. Section 65(105) defi....
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....onsidered in case of disputes. 5.6.4 However initially when the definition was introduced, there was a reference to rent-a-cab scheme under Motor Vehicles Act and subsequently when it was implemented, the reference to rent-a-cab scheme under Motor Vehicles Act was omitted even prior to 2007. It has to be noted that the rent-a-cab scheme under Section 75 of Motor Vehicles Act is applicable only to motor cabs and motor cycles and maxi cabs are not included. This could be one of the reasons why the reference to Motor Vehicles Act was omitted since the rent-a-cab scheme as envisaged in Motor Vehicles Act was applicable only to motor cab. If the intention of the law makers was to apply the rent-a-cab scheme as envisaged in Motor Vehicles Act for the purpose of levy of service tax, necessarily they had to provide a clause that for the purpose of this clause, motor cabs and maxi cabs have to be considered as covered under rent-a-cab scheme envisaged in Motor Vehicles Act. In the absence of such a provision, prima facie, on an analysis of the definitions, a layman's conclusion would be (without knowing the law laid down by judiciary) would be that the definition in service tax has to be ....
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....rented for educational institutions and in the meaning the words used are hire or reward. The Motor Vehicles Act also does not differentiate between renting and hiring. This is because maxi cab and motor cab have been defined as the motor vehicles for hire or reward. It has to be noted that in the case of an omnibus the words hire or reward are missing. In the scheme for rent-a-cab, the scheme is applicable only to motor cabs which would show that the scheme is applicable only to motor cabs, the meaning of which itself according to Motor Vehicles Act is a motor vehicle for hire or reward. There is a clear distinction in the Motor Vehicles Act between vehicles which are exclusively meant for renting or for hiring for reward and motor vehicles which can be used personally as well as for other purpose. Where a definition is exclusively meant for motor vehicles which can be hired or rented, the definition itself provides for it. Therefore when words like maxi cab and motor cab are used it means it is applicable only to vehicles which are meant for hire or reward. 5.6.8 It can be seen that even though the relevant Section provides for Central Government making the Rules for rent-a-cab....