2008 (5) TMI 113 - AT - Service Tax

Demand on services as tour operator & rent a cab direction of pre-deposit of 50 % given by commissioner was not complied with on the ground that substantial portion of the demand relating to tour operators service is not payable in view of notification dated 4-4-07 - also submits that the nature of operation undertaken by them will not qualify for levy of the Service tax under rent a cab scheme pre-deposit ordered - commissioner is directed to dispose the appeal on merits

Summary

Issues:
1. Confirmation of demand of service tax on two services by the Original Authority.
2. Imposition of penalties under various sections on the appellant firm.
3. Compliance with the stay order by the appellant.
4. Applicability of notifications dated 4th April 2007 on the demand related to the service of tour operators.
5. Qualification for levy of Service tax under the rent a cab scheme.
6. Direction to deposit a specific sum by a certain date for further proceedings.

Analysis:
1. The Original Authority confirmed a demand of service tax of approximately Rs. 28.64 lakhs on two services provided by the appellant firm, namely as a tour operator and under the head rent a cab. Penalties were also imposed under various sections on the appellant firm and another appellant.

2. On appeal to the Commissioner (Appeals), a stay order was issued requiring 50% of the duty confirmed as pre-deposit. However, the appellant did not comply with the stay order. The appellant argued for modification of the stay order, contending that a substantial portion of the demand related to the service of tour operators was not payable due to notifications issued under section 11C. The nature of operation for the rent a cab service was also questioned. The Commissioner (Appeals) did not address these arguments and disposed of the appeal based on the failure to comply with the pre-deposit order.

3. The Appellate Tribunal directed the appellant firm to deposit Rs. 5 lakhs within eight weeks and report compliance to the Commissioner (Appeals) by a specified date. Upon compliance, the Commissioner (Appeals) was instructed to proceed with hearing the appeals on merit without requiring further deposit. Non-compliance would result in dismissal of the appeals without expressing any opinion on the case's merits.

4. The appeal and stay petition were both disposed of based on the terms outlined in the judgment, providing a clear direction for compliance and further proceedings. The Tribunal emphasized the importance of adhering to the deposit requirement and the subsequent hearing process to ensure a fair and just resolution of the appeals.

Conclusion:
The judgment addressed the confirmation of service tax demand on two services, penalties imposed, compliance with the stay order, applicability of notifications on demand related to tour operators, and qualification for levy of Service tax under the rent a cab scheme. The Tribunal's decision to direct a specific deposit amount and compliance timeline for further proceedings aimed to ensure a fair and thorough consideration of the appeals' merits without additional deposit requirements.