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2016 (9) TMI 688 - AT - Service TaxTour operator services - Taxability of services of transportation of employees of M/s. HPCL from the respective residences and to their place of work - Held that - Appellant were not engaged in the business or planning, scheduling, organizing or arranging package tour of their own as provided under the new definition of tour operator service but were adhering to the conditions laid down with various customers. Therefore, it cannot be said that they were covered under the first part of the amended definition of tour operator . As already discussed, the vehicles are also not tourist vehicles so as to be covered under the second part of the definition - Decision in the case of L.N. Gupta Transport Co. 2016 (2) TMI 547 - CESTAT MUMBAI and others cases followed. - Decided in favor of assessee.
Issues Involved:
Demand of Service Tax on transportation services provided to employees of a company. Analysis: 1. The issue in this case revolves around the demand of Service Tax on the transportation services provided by the appellants to the employees of a company. The demand amounts to ?6,20,822 on the services of transporting employees from their residences to the place of work. The total value of work done in the specified three years is ?1,24,16,433, with proposed Service Tax, interest, and penalties. The original authority and the first appellate authority had confirmed the proposals in the notice, leading to this appeal. 2. The appellant's counsel argued that the vehicles used by the appellants were granted temporary permits as contract carriages, not tourist vehicles. The definition of a Tour Operator service requires the use of a Tourist Vehicle, as per the Motor Vehicles Act and Central Motor Vehicles Rules. It was contended that the vehicles did not conform to the specifications required under Rule 128 of the Central Motor Vehicles Rules, making them ineligible for classification as Tourist Vehicles. Several legal citations were presented to support this argument. 3. On the department's behalf, it was argued that the vehicles, being contract carriages, automatically qualified as tourist vehicles. The department relied on a judgment of the Madras High Court to support their stance. 4. The tribunal considered the arguments from both sides and noted that the issue had been addressed in various judgments, including those of L.N. Gupta Transport Co., Jai Somnath Transport, and Capricorn Transways Pvt. Ltd. The Madras High Court judgment was referred to in all these cases, emphasizing the requirement for vehicles to meet the specifications under Rule 128 to be classified as Tourist Vehicles. 5. The tribunal's detailed analysis highlighted that for the period pre-2004, the vehicles used by the appellants did not meet the criteria to be considered Tourist Vehicles under Rule 128. Post-2004, the appellants were found not to be engaged in planning, scheduling, organizing, or arranging tours, as required for Tour Operator services. The tribunal concluded that the demand for Service Tax was unsustainable, and the appeal was allowed with consequential reliefs. In conclusion, the tribunal ruled in favor of the appellant, setting aside the demand for Service Tax on the transportation services provided to the employees. The judgment provided a detailed analysis of the legal requirements for classification as a Tour Operator service and emphasized the need for vehicles to meet specific criteria under the Motor Vehicles Act and Central Motor Vehicles Rules to be considered Tourist Vehicles.
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