2015 (3) TMI 86 - AT - Service Tax

Rent-a-cab service - non-compliance with Section 35F - Held that - Appellant has made available their buses to the APSRTC under agreement wherein the APSRTC would ply the buses on predetermined routes covered by stage carriage permits held by the owner, with a time schedule fixed by the APSRTC, and the bus owner would provide the services of drivers to the Corporation and would be paid by the corporation, hire charges per km. On these and allied facts, a prima facie view taken in the cited Stay Order to the effect that the activity of the bus owners could not be classified as rent-a-cab service. Based on this view, waiver and stay were granted in those cases, The same view has to be taken in this case also. ln other words, the present appellant has made out a prima facie case against the demand of service tax under the head 'rent-a-cab service. On this basis, the lower appellate authority should dispense with predeposit and dispose of the assessee s appeal (filed against orders-in-original) on merits without insisting on any predeposit. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Stay application for waiver of predeposit and stay of recovery of impugned demands.
- Rejection of appeal by Commissioner (Appeals) due to non-compliance with predeposit requirement.
- Classification of activity as 'rent-a-cab service' for service tax purposes.
- Prima facie case for waiver of predeposit based on previous stay order.
- Direction to Commissioner (Appeals) for disposal of appeal on merits without predeposit.

Analysis:
The appellant filed a stay application seeking waiver of predeposit and stay of recovery of the impugned demands. Despite the absence of the appellant, after considering the records and hearing the learned A.R., the case was deemed fit for summary disposal. The Department had issued a show-cause notice demanding service tax under the 'rent-a-cab' service head, along with interest and penalties. The original authority ruled against the appellant, leading to an appeal to the Commissioner (Appeals) with a request for predeposit waiver. The Commissioner (Appeals) required a 10% predeposit, which the appellant failed to make, resulting in the rejection of the appeal solely based on non-compliance with Section 35 F. The current appeal challenges this rejection.

Upon careful consideration, the Tribunal found a prima facie case for the appellant based on a previous stay order issued by the Bench in similar cases. The appellant had provided buses to APSRTC under an agreement where the buses were operated on predetermined routes by APSRTC with drivers provided by the appellant, paid on a per km basis. The Tribunal opined that this activity could not be classified as 'rent-a-cab service,' as seen in the cited Stay Order. Consequently, the Tribunal directed the lower appellate authority to dispense with predeposit and adjudicate the appeal on merits without requiring any predeposit, as the appellant had made out a prima facie case against the service tax demand under the 'rent-a-cab service' category.

In conclusion, the impugned order was set aside, and the appeal was allowed by way of remand with a specific instruction to the Commissioner (Appeals) to decide the appellant's appeal on merits without insisting on any predeposit. It was emphasized that the appellant must be given a fair opportunity to present their case, and a reasoned order should be issued by the Commissioner (Appeals) after due consideration.