2016 (2) TMI 368 - AT - Service Tax

Tour Operator services - whether the vehicles operated by the appellant conform to the definition of tourist vehicle as provided in terms of Section 2(43) of the Motor Vehicle Act read with Rule 128 of the Central Motor Vehicles Rules. - Held that - to be covered under the category of Tour Operator Service , the vehicles used should meet the specifications of tourist vehicle as specified under Rule 128 of the Central Motor Vehicles Rules. - the buses do not conform to the specifications in terms of Rule 128 of the Central Motor Vehicles Rules. - No demand - Decided against the Revenue.

Summary

Issues:
1. Interpretation of the definition of tourist vehicle under Section 2(43) of the Motor Vehicle Act read with Rule 128 of the Central Motor Vehicles Rules.
2. Application of service tax on vehicles operated by the appellant under the category of 'Tour Operator' as per Section 65(115) of the Finance Act.

Analysis:
1. The appeal filed by Revenue was against the Order-in-Appeal passed by the Commissioner (Appeals), Aurangabad. The Commissioner was directed to examine whether the vehicles operated by the appellant met the definition of a tourist vehicle as provided in Section 2(43) of the Motor Vehicle Act along with Rule 128 of the Central Motor Vehicles Rules. The Revenue sought to levy service tax on the vehicles operated by the appellant under the category of 'Tour Operator' defined under Section 65(115) of the Finance Act.

2. The Tribunal considered a previous order in the case of Jai Somnath & Others where it was decided that for a vehicle to fall under the category of 'Tour Operator Service', it must meet the specifications of a tourist vehicle as specified under Rule 128 of the Central Motor Vehicles Rules. Various judgments, including those of the High Courts and Supreme Court, were taken into account. In the present case, the Commissioner confirmed in the impugned order that the buses operated by the appellant did not conform to the specifications outlined in Rule 128 of the Central Motor Vehicles Rules.

3. Consequently, the Tribunal upheld the impugned order, affirming that the appellant's buses did not meet the required specifications to be classified as tourist vehicles. As a result, the Revenue's appeal was dismissed, and the decision was pronounced in court on 10.11.2015.