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Issues: Application for waiver of pre-deposit of demand of Service Tax and penalty due to providing Rent-a-cab service.
Analysis: 1. The demand of Service Tax and penalty was confirmed based on the ground that the applicants were providing the Service of Rent-a-cab. The relevant provisions of Section 65 Sub-section 91 of Chapter V of the Finance Act, 1994 define a Rent-a-cab Scheme operator as any person engaged in the business of renting cabs, and Taxable service is defined as "Any service provided to a person, by a Rent-a-cab Scheme operator in relation to the renting of cabs." 2. The applicants did not dispute providing a Taxable Service as defined under the Finance Act before the lower Authorities. However, during the appeal, they referred to a previous Tribunal decision where it was held that renting a cab on a kilometer basis is not a taxable service. The Revenue argued that since the applicants rented cabs both on a monthly and kilometer basis as per the agreement with M/s. GAIL (India) Ltd., the previous Tribunal decision does not apply in this case. 3. The Tribunal found that the applicants were indeed providing a taxable service as a rent-a-cab operator by renting cabs on a monthly basis to M/s. GAIL (India) Ltd. and partly on a kilometer basis. Consequently, the Tribunal directed the applicants to deposit a specific amount for the hearing of the appeal within eight weeks, while waiving the remaining amount of duty and penalty for the appeal hearing. The case was adjourned for compliance reporting to a later date. This judgment highlights the importance of understanding the specific nature of services provided under the relevant legal provisions and how previous tribunal decisions may or may not apply based on the specific circumstances of each case.
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