2007 (8) TMI 56 - AT - Service Tax

Rent-a-cab operator service - Appellant contended that they not liable for service tax on Rent-a-cab operator service on the ground of Board s ST Circular 56/5/2003 dated 25-04-2003 - Matter remanded to Commissioner(A) for final decision

Summary

Issues:
1. Appeal against Order-in-Appeal No. 151/2005-C.E.
2. Service Tax liability for 'Rent-a-cab' service.
3. Applicability of para 4 of Board's ST Circular No. 56/5/2003.
4. Denial of exemption by lower authority.
5. Need for remand to Commissioner (Appeals).

Analysis:
1. The appeal was filed against Order-in-Appeal No. 151/2005-C.E. by the Commissioner of Central Excise (Appeals), Mangalore. A misc. application for additional grounds was allowed by the Appellate Tribunal CESTAT, Bangalore.

2. The appellant provided 'Rent-a-cab' service to M/s. Manipal Informatics, and the Revenue alleged non-payment of Service Tax. The Original Authority confirmed a demand of Service Tax, interest, and imposed penalties. The appellant contested this order, leading to an appeal before the Commissioner (Appeals) and subsequently to the Tribunal.

3. The appellant sought exemption under para 4 of Board's ST Circular No. 56/5/2003, stating that secondary services provided to primary services exported are not liable for Service Tax. However, the lower authority denied this exemption, claiming M/s. Manipal Informatics did not provide export services as they were involved in software development, not service provision.

4. The Tribunal noted that the appellate authority did not address the issue of whether M/s. Manipal Informatics provided export services such as telemarketing and call center services. As a result, the Tribunal remanded the matter to the Commissioner (Appeals) for a finding on this crucial point, emphasizing the need for a proper examination of facts to determine the appellant's entitlement to the exemption under the Board's Circular.

5. The Tribunal allowed the appeal by way of remand, instructing the Commissioner (Appeals) to make a decision within four months from the date of the order regarding the applicability of the exemption based on whether M/s. Manipal Informatics provided export services. The judgment highlighted the importance of a thorough examination of facts and proper application of the law in determining the Service Tax liability for the 'Rent-a-cab' service provided by the appellant.