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2017 (8) TMI 70 - AT - Service TaxRent a cab service - demand on the ground that appellant are the owners and they have to keep the vehicle in their own garage and take care of repairs and maintenance but required to operate the buses in specified routes by APSRTC, incurring all the operating cost, paying all taxes and compensation in the case of any accidents and accounting for it - Held that - similar issue decided in the case of SK. Kareemun W/o. Khadeer and others Versus Commissioner of Central Excise, Customs And Service Tax Hyderabad-III 2015 (1) TMI 282 - CESTAT BANGALORE , where it was held that service tax liability arises on the individual bus owners. By holding so, the Bench upheld the tax liability with interest but set aside the penalty. Decided partly in favor of appellant.
Issues:
Service tax liability on bus owners for hiring buses by APSRTC, imposition of penalties by adjudicating authority and first appellate authority. Analysis: The judgment by the Appellate Tribunal CESTAT HYDERABAD dealt with the service tax liability of bus owners who hired their buses to APSRTC. The case revolved around the argument that the bus owners were liable to pay service tax under the "rent a cab" service as they operated the buses for APSRTC under specific terms and conditions. The Revenue contended that the bus owners were responsible for the maintenance, operation, and costs of the buses while following routes specified by APSRTC. The adjudicating authority upheld the demands for service tax, interest, and penalties. However, the Tribunal referred to a previous case involving a similar issue and noted that the service tax liability indeed rested with the individual bus owners. The Tribunal dismissed the appeals filed by the bus owners, upholding the service tax liability and interest. The penalties imposed by the adjudicating authority and first appellate authority were deemed unwarranted and subsequently set aside. The Tribunal highlighted a previous case involving the hiring of buses by APSRTC, where the service tax liability was established to be on the bus owners. The Apex Court had dismissed civil appeals filed against the order, further solidifying the liability of the bus owners for service tax. The Tribunal's decision was influenced by the findings in the earlier case and the Apex Court's refusal to interfere with the judgment. As a result, the appeals filed by the bus owners were dismissed, affirming their service tax liability and interest obligations. However, the Tribunal found the penalties imposed by the lower authorities to be unjustified, especially considering the dispute over the issue and the precedent set by previous judgments. Consequently, all penalties imposed on the bus owners were set aside by the Tribunal. In conclusion, the Appellate Tribunal CESTAT HYDERABAD ruled on the service tax liability of bus owners who hired their buses to APSRTC, ultimately upholding the liability and interest obligations. The Tribunal's decision was influenced by a previous case and the Apex Court's dismissal of civil appeals challenging the service tax liability. While penalties imposed by lower authorities were overturned due to the ongoing dispute and established legal precedents, the service tax liability of the bus owners remained intact as per the Tribunal's judgment.
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