2013 (11) TMI 295 - AT - Service Tax

Benefit of Notification No. 39/97 Rent-a-cab operator service Held that - The appellants are giving only cabs thus the appellants are not covered under the scope of tour operator service - the appellants are not entitled for the benefit of Notification 39/97-ST which covers only tour operator service - appellants are providing rent-a-cab service, there was no infirmity in the order for confirming the demand. Penalty Held that - The appellants are registered as a provider of tour operator and paying tax and also filing statutory returns thus according to Section 80 of the Finance Act, it is not a case for imposition of any penalties thus the penalties set aside Decided partly in favour of assessee.

Summary

Issues:
1. Whether the appellant wrongly availed the benefit of Notification NO. 39/97-ST?
2. Whether the demand for service tax is time-barred due to suppression of facts?
3. Whether the appellant is entitled to the benefit of Notification 39/97-ST as a tour operator?
4. Whether penalties imposed on the appellant are justified?

Analysis:
1. The appellant filed an appeal against an order confirming a demand of Rs. 4,49,021/- along with interest and penalties. The appellant claimed they were not covered under the rent-a-cab or tour operator service as they did not meet the criteria of having 50 cabs or a tourist bus. However, they paid service tax under the category of tour operator by availing the benefit of Notification 39/97-ST. The Tribunal found that since the appellants only provided cabs and not tourist buses, they were not entitled to the benefit of the Notification covering tour operator service. The demand was confirmed based on this finding.

2. The appellant argued that the demand was time-barred as the show cause notice was issued in 2006 for the period 2000-04, invoking the extended period of limitation on the ground of suppression. The Tribunal noted that the appellants regularly filed ST-3 returns, indicating no suppression of facts. Therefore, the allegation of suppression was deemed unsustainable, and the demand was held to be time-barred.

3. The Revenue contended that the appellant, not having a tourist bus, wrongly paid service tax under the tour operator category by availing the Notification benefit, despite providing rent-a-cab service. The Tribunal concurred that as the appellants lacked a tourist bus, they were not within the scope of tour operator service. Consequently, they were not entitled to the Notification benefit. The demand was upheld based on the appellant's provision of rent-a-cab service.

4. Regarding penalties, the Tribunal found that since the appellants were registered as a tour operator, paid taxes accordingly, and filed statutory returns, no penalties were warranted under Section 80 of the Finance Act. As a result, the penalties imposed were set aside. The appeal was disposed of accordingly.