2017 (4) TMI 41 - AT - Service Tax

Levy of service tax - appellant engaged private buses to ply under the banner of M/s ASTC on bus routes reserved for M/s ASTC only. The private buses which were under the names, banners and colours of M/s ASTC, as per agreement. It is claimed that 90% collection will have to go to the operators of the private buses and remaining 10% will have to go M/s ASTC for providing bus stoppage, banners facilities etc. Staff and bus were to be provided the private bus owners - Held that - the entire revenue collected by the private operators, will have to be deposited to M/s ASTC, after that, M/s ASTC made the payment to the consignor operator of 90% of the revenue collected. From the impugned order, it appears that the private bus operators paid 10% to M/s ASTC and retained 90%. This is the conflicting position between the situations, which needs proper clarification - matter remanded back to the adjudicating authority to decide the issue in denovo - appeal allowed by of remand.

Summary

Issues: Appeal against Order-in-Original regarding taxation of bus services provided by a statutory corporation involving private bus operators.

In this case, the appellant, a statutory corporation providing transport services, appealed against the Order-in-Original issued by the Commissioner of Central Excise, Shillong, for the period from 01.07.2003 to 31.12.2005. The appellant engaged private buses to operate under its banner due to a shortage of buses. The private buses operated on routes reserved for the appellant, with revenue sharing agreements where 90% of collections went to the private operators and 10% to the appellant for providing facilities. The lower authority deemed this service taxable under sub-clause (zzb) of clause (105) of Section 65 of the Finance Act, 1944. The appellant contended that a Gazette Notification declared the service in the public interest, and revenue collected by private operators was to be deposited to the appellant. The appellant argued that the service provided was a public interest transport service as per a Government Notification.

Upon hearing both parties, the Tribunal noted conflicting situations in the case and set aside the impugned order. The matter was remanded back to the adjudicating authority for a fresh decision, considering the conflicting positions and providing a reasonable opportunity to the appellant. The Tribunal allowed the appeal by way of remand, allowing for the admission of fresh evidence if necessary. The decision was made to ensure a proper clarification of the conflicting positions presented in the case and to provide a fair opportunity for the appellant to present their case.