2011 (8) TMI 333 - AT - Service Tax

Tax liability - Rent-a-Cab Services - They have taken service tax registration they never disclosed the nature of services rendered nor they furnished ST-3 returns which was mandatory for a person providing taxable services. The question naturally arises that if they were not aware that they had to pay service tax why should they take a service tax registration - Held that non-furnishing of information or non filing of returns resulted in non payment of service tax and this action on the part of appellants tantamounts to deliberate non-compliance with the provisions - In other words this is only implying suppression of facts with an intent to evade payment of service tax - Therefore the extended period under Section 73(1) is rightly invoked by the Revenue - Decided against the assessee.

Summary

Issues:
1. Determination of services falling under Rent-a-Cab Service or vehicle hire basis.
2. Applicability of service tax on services provided.
3. Invocation of the extended period under Section 73(1) for non-payment of service tax.

Analysis:

1. The main issue in this case was to determine whether the services provided by the appellants fell under Rent-a-Cab Service or were merely vehicle hire services. The Tribunal analyzed the contract entered into by the appellants with the Ahmedabad Municipal Corporation. The conditions of the contract specified minimum kilometers for different shifts, additional charges for extra kilometers or hours, and the calculation of bills on a pro-rata basis. The Tribunal noted that the contract terms clearly indicated that the services were not provided on an hourly basis but on a monthly basis with specific conditions regarding time and mileage. The Commissioner (Appeal) also observed that the judgments cited by the appellants were not applicable to the present case, as the contractual terms were distinct. Consequently, the Tribunal agreed with the Commissioner (Appeal) that the services provided fell under the taxable category of Rent-a-Cab scheme operators.

2. Another issue raised was the applicability of service tax on the services provided by the appellants. The appellants claimed they were unaware of the requirement to pay service tax, despite holding service tax registration. However, they failed to disclose the nature of services rendered or file mandatory ST-3 returns. The Tribunal held that the non-furnishing of information or non-filing of returns amounted to deliberate non-compliance with the provisions, implying suppression of facts to evade service tax payment. As a result, the extended period under Section 73(1) was rightfully invoked by the Revenue. The Tribunal concluded that the order of the Commissioner (Appeal) was legally correct and justified, leading to the rejection of the appeal filed by the appellants.

3. In summary, the Tribunal's detailed analysis focused on determining the nature of services provided by the appellants, the applicability of service tax, and the invocation of the extended period for non-payment of service tax. The judgment highlighted the importance of complying with tax regulations and the consequences of deliberate non-compliance. The decision reaffirmed the legal correctness of the Commissioner (Appeal)'s order and upheld the classification of the services as taxable under the Rent-a-Cab scheme operators category.