2008 (12) TMI 64 - AT - Service Tax

Whether the respondents were providing tour operator s service and hence liable for service tax - held that service tax would be attracted only in case tour operator is using tourist vehicle and not otherwise - Since there is no evidence that the vehicles being used by the respondent are tourist vehicles as defined under Section 2(43) of Motor Vehicle Act read with Rule 128 of Central Motor Vehicle Rules the respondent s activity would not be covered by the tour operator s service

Summary

Issues:
Whether the respondents were providing tour operator's service during the disputed period and liable for service tax.

Analysis:
The case involved a Revenue's appeal against an Order-in-Appeal dated 11th January, 2007, questioning whether the respondents provided tour operator's service from 5th March, 2005, to 6th February, 2006, and thus were liable for service tax. The Departmental Representative argued that the respondents operated tours in tourist vehicles, attracting service tax. The definition of 'Tour Operator' under the inclusive part was crucial, requiring the operation of tours in tourist vehicles as per the Motor Vehicle Act, 1988. The term 'Tour' was defined as a journey from one place to another, and 'Tourist Vehicle' was specified under the Motor Vehicle Act and Central Motor Vehicle Rules. The main issue was whether the vehicles used by the respondents qualified as 'tourist vehicles' to fall under the tour operator's service. Legal precedents were cited, emphasizing the necessity for vehicles to conform to Rule 128 of the Central Motor Vehicle Rules. The absence of evidence proving the vehicles as tourist vehicles led to the conclusion that the respondent's activity did not fall under the tour operator's service, upholding the impugned order. The Tribunal clarified the definition of 'tourist vehicle' under Rule 128, emphasizing the requirement for vehicles to meet specific criteria. The judgment highlighted the importance of using tourist vehicles for service tax liability, as established by legal precedents. Ultimately, the lack of evidence regarding the vehicles being used as tourist vehicles resulted in the dismissal of the Revenue's appeal, affirming the impugned order.