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2007 (5) TMI 29 - AT - Service TaxDemand(service tax) Alleged that appellant is liable for service tax liability under Tour operator Service and Rent -a -Cab Operator Service and accordingly penalty imposed on him Held that appellant activity is not covered under given taxable services, so demand and penalty not sustained
Issues Involved:
1. Demand of service tax on the appellant as a tour operator 2. Demand of service tax on the appellant as a rent-a-cab operator 3. Imposition of penalty under Section 78 of the Finance Act, 1994 Analysis of Judgment: Issue 1: Demand of service tax on the appellant as a tour operator The appeal challenged the order confirming a service tax demand on the appellant for operating a bus between two points as a tour operator. The appellant argued that they were not conducting tours but transporting passengers/employees. The Tribunal examined the registration of the buses under the Motor Vehicle Act and found that they were registered as contract carriages, not tourist vehicles as required for tour operators. Referring to previous decisions, the Tribunal emphasized the need for vehicles to conform to specific rules to be considered tourist vehicles. The judgment highlighted that the appellant did not operate tourist vehicles as defined by the Motor Vehicle Act, and thus, the service tax demand as a tour operator was set aside. Issue 2: Demand of service tax on the appellant as a rent-a-cab operator Regarding the demand of service tax on the appellant as a rent-a-cab operator, the appellant did not contest this aspect. The Tribunal upheld this portion of the order confirming the tax demand. However, since the majority of the service tax demand was set aside for the tour operator service, the Tribunal found no justification for imposing any penalty on the appellant. Therefore, the penalties imposed were deemed unwarranted and set aside. Issue 3: Imposition of penalty under Section 78 of the Finance Act, 1994 Given the setting aside of the service tax demand on the appellant as a tour operator and the confirmation of the demand as a rent-a-cab operator, the Tribunal concluded that penalties imposed on the appellant were unjustified. Consequently, the penalties were revoked. The impugned order was partially set aside, and the appeal was allowed in favor of the appellant on the tour operator service issue while upholding the demand on the rent-a-cab operator service. This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Ahmedabad, provides insights into the legal reasoning and application of relevant laws in determining the service tax liabilities of the appellant.
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