2017 (9) TMI 1188 - AT - Service Tax

Business Auxiliary Service - rent-a-cab service - liability of tax - Held that - Entire adjudication has been made on the basis of 3rd party evidence which were not confronted to the appellant for rebuttal. This ground alone is enough to order for grant another opportunity to the appellant to plead its defence if any - appellant may get fair opportunity of hearing through the course of re-adjudication - appeal allowed by way of remand.

Summary

Issues: Taxability of rent-a-cab services and commission under Business Auxiliary Service (BAS)

The judgment addresses the challenge raised by the appellant regarding the taxability of rent-a-cab services and commission received. The appellant argued that the services provided did not fall under service tax, as the cabs were rented on a Kilo Meter basis charge or a day basis charge, without leaving the vehicle exclusively in the hands of the hirer. The appellant contended that the charges agreed upon did not amount to monthly renting of the cabs. The Revenue relied on third-party information from the balance sheet of South Eastern Coalfields Ltd. (SECL) to issue show-cause notices under Section 72 of the Finance Act, 1994. The total taxable value and service tax were determined for the period under consideration. The appellant claimed that the authorities did not examine the records to ascertain taxability and that the notices were issued belatedly, making the demand time-barred. The judgment highlighted that the authorities proceeded without considering the appellant's documentary evidence supporting the contention that the services provided were not taxable.

In the context of the taxability of rent-a-cab services, the appellant expressed willingness to cooperate with the Revenue for a reexamination of the matter, emphasizing that no vehicle was exclusively controlled by the hirer. The appellant also argued against the tax liability on the commission received, stating that no auxiliary service was provided to carry on business, and the commission was an independent receipt under contractual terms. The Revenue contended that due to the appellant's non-cooperation, the tax liability was appropriately determined. The judgment emphasized the importance of granting the appellant another opportunity to present its defense, as the entire adjudication was based on third-party evidence not confronted to the appellant for rebuttal.

The judgment referred to a previous case law regarding rent-a-cab services and highlighted the need for the appellant to have a fair hearing to present its defense on both the rent-a-cab services and commission. Considering the appellant's request for a fair opportunity of hearing, the matter was remanded to the adjudicating authority for readjudication following due process of justice. The decision aimed to ensure that the appellant had the chance to provide evidence and arguments in support of their position regarding the taxability of the services and commission under the relevant provisions.