2006 (4) TMI 40 - AT - Service Tax

Service Tax - Tour Operator - For registration in the category of tourist vehicles, vehicle has to satisfy the specification laid down in Rule 128 read with Section 2(43) of Motor Vehicles Act hence, assessee not required to be registered in category of Tour operator - Demand not confirmed

Summary

Issues:
Challenge to revision order holding appellants liable for service tax as Tour Operator under Section 65(78) of Finance Act; Imposition of penalty; Show Cause Notices without quantifying demands; Appellants' claim of not being Tour Operator; Specifications of tourist vehicle under Rule 128 of Motor Vehicles Rules; Demands not specified in show cause notice; Tribunal rulings on demands' specification in show cause notice; Commissioner's direction to quantify amounts; Applicability of penalty for non-registration as Tour Operator.

Analysis:
1. Challenge to Revision Order: The appellants contested the revision order holding them liable for service tax as a Tour Operator under Section 65(78) of the Finance Act. The Commissioner had also imposed a penalty. The appellants argued that the demands were not quantified in the Show Cause Notices, and they claimed not to be Tour Operators but registered as a contract vehicle under Motor Vehicles Rules.

2. Specifications of Tourist Vehicle: The appellants argued that their vehicle did not meet the specifications of a tourist vehicle as per Rule 128 of Motor Vehicles Rules. They referred to a Madras High Court judgment emphasizing that tourist vehicles must satisfy specific criteria. The appellants presented the RC book of their vehicle to demonstrate that it did not meet the required specifications for a tourist vehicle.

3. Demands' Specification in Show Cause Notice: The appellants relied on various Tribunal rulings and a judgment from the Allahabad High Court to support their claim that demands must be specified in the show cause notice to be confirmed. They argued that the demands were not sustainable as they were not raised or quantified in the notices.

4. Commissioner's Position and Tribunal Rulings: The JDR argued in favor of the Commissioner's decision to confirm the demands and direct quantification. He contended that demands could be quantified even after issuing the show cause notice. However, the Tribunal found that demands cannot be confirmed without specifying and quantifying them in the notice, as per legal precedents.

5. Judgment and Conclusion: The Tribunal ruled in favor of the appellants, noting that the demands were not specified in the show cause notices and that the vehicle did not meet the criteria for a tourist vehicle. The appellants were not required to be registered as Tour Operators. The impugned order was set aside, and the appeal was allowed with consequential relief, if any. The judgment highlighted the importance of specifying demands in show cause notices and ensuring compliance with vehicle specifications for registration as a Tour Operator.