TaxTMI 
TaxTMI 
2023 (2) TMI 1241
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....ct, 1994 along with interest and penalty. A penalty of Rs. 40,00,000/- under section 76 was imposed. 2. M/s Carzonrent (India) Pvt. Ltd. (hereinafter referred to as 'Appellant') having its registered office situated at 9th Floor, Videocon Tower, Block E-1, Jhandewalan Extn. New Delhi-110055, is a private limited company, and is centrally registered with the Service Tax Commissionerate, Delhi vide Service Tax Registration No. AABCC5486CST007 dated 02.12.2005 under the following category of services: a. Rent-a-Cab Service, b. Business Auxiliary Service, c. Advertising Services, d. Franchise Service, e. Business Support Services, f. Information Technologies, g. Legal Con....
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....ion of interest and penalties. Aggrieved by the impugned order, the appellant has filed the present appeal. 3. Learned counsel for the appellant submitted that during the relevant period, the appellant had entered into identical contracts for leasing of vehicles and thereafter for providing fleet management service in respect of such vehicles, with all its clients. He submitted that with regard to the activity of leasing of vehicles, the appellant charges lease rent from client as consideration which is payable in advance for each calendar month. As per these lease agreements, he submitted that it is clearly evident that by executing the agreement, the appellant had transferred all substantial rights to use the vehicle for consideration ....
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.... Representative stated that the Tribunal, Delhi vide its final order dated 22.12.2016 (supra) has held that the appellants are liable to service tax. He also stated that the appeal for the previous period (pre-negative list and post negative list) was on identical facts which has been disposed of by the Tribunal. Therefore, the present appeal is liable to be dismissed in the same terms. 7. We have heard the learned counsel for the appellants and the learned authorized representative. We note that the issue on levy of service tax on lease rental charges has been decided by the Principal Bench of this Tribunal in the appellant's own case. The relevant paragraphs of the said decision is reproduced hereinbelow: "10. Admittedly, the ....
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....ut in the impugned order there is no reference to period of renting in the statutory provisions. The liability to tax arises when a rent-a-cab operator provides a vehicle to nother person on rent and receives consideration. The plain reading of the scope of the tax liability is to this effect only. The nature of arrangement may vary from party to party. In CST v. Vijay Travels [2014(36) S.T.R. 513] it was held that when a person carries on continuous activity of renting of a cab, i.e., letting for the use in case of a maxi cab or motor vehicle, such renting of a vehicle would invite taxable service. The Tribunal in Ghanshyam Gupta [2017(11)STT 130] held that when the assessee rented out a vehicle to a hirer, where the vehicle was stationed ....
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....rately discussed in the impugned order, we note that the clients were never became owners of the cabs. They can use the cabs as long as they are paying rent to the appellant for such usage. The clients do not possess full effective control of the cabs, which are leased to them by the notices. As recorded by the Original Authority, the appellants do not fulfil the attributes as laid down by the Hon'ble Supreme Court to determine and conclude the transaction to be a "deemed sale". As such, we find that the appellants failed to sustain legally their plea regarding non-applicability of the provisions of Service Tax to the transactions of renting of motor cabs and on such consideration received. 12. In R.S. Travels [2008 12 S.T.R. 27 (T....
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....he Hon'ble High Court held that the service tax and VAT were mutually exclusive and the dominant object of transaction would determine the nature of transaction. We find that applying the said ratio and referring to the terms of the agreement, in the present case, the dominant object of the transaction is one of the renting /hire motor vehicles and not transfer of control or possession or "deemed sale of such vehicle". We note that the similar such decisions relied upon by the appellant were all dealing with specific set of facts in terms of the agreement relevant to the respective cases. We note that the principle laid down by the Hon'ble Supreme Court in BSNL (supra) will guide while determining the actual nature of transaction between th....