2008 (9) TMI 40 - AT - Service Tax

Rent-a-cab service - appellant vehemently argues that the payment is made on the basis of actual kilometers run even though the agreement and final acceptance letter talk of lumpsum payment for distance of 2000 kilometers and above that payment per kilometer - more detailed verification of the contract and the nature of services provided, is required -Matter is remanded to Commissioner (Appeals) to consider the matter in greater detail appellant directed to produce the relevant receipts

Summary

Issues: Determination of service tax liability on services provided by the appellant under 'Rent-a-Cab' service category.

Analysis:
1. Issue of Service Tax Liability: The appeals were filed against a common order concerning the appellants for different periods between 2001-2002 to 2005-2006. The Commissioner (Appeals) upheld the Revenue's stand that the services provided by the appellants fell under the 'Rent-a-Cab' service category, resulting in a service tax demand of Rs.1,40,014. However, the penalty on the appellant was reduced to some extent.

2. Arguments and References: The advocate for the appellants relied on the Tribunal's judgment in the case of Kuldip Singh Gill Vs. CCE to support their argument. They emphasized that the payment to the appellant was based on the number of kilometers run, citing specific details from the contract with BSNL. On the other hand, the SDR referred to various Tribunal decisions supporting the contention that the appellant's services were akin to rent-a-cab services.

3. Judicial Analysis and Remand: The Member (Technical) analyzed the submissions from both sides and noted discrepancies in the payment structure and nature of services provided by the appellant. Emphasizing the need for a detailed verification of the contract and services, the Member remanded the matter to the Commissioner (Appeals) for further consideration. The Member highlighted the importance of examining what transpires when the distance run is less than 2000 kms in a month, suggesting that if BSNL had to pay a lump sum even for shorter distances, it could indicate a rent-a-cab service. The Commissioner (Appeals) was directed to conduct a thorough review, considering all aspects of the case and making a conclusion in accordance with the law.

4. Final Decision: The matter was remanded to the Commissioner (Appeals) with specific directions for a detailed reevaluation, emphasizing the need for a comprehensive assessment of the contract terms and services provided by the appellant. The Member's opinion was provided as guidance, urging a thorough examination before reaching a final decision on the service tax liability issue.