2010 (2) TMI 466 - AT - Service Tax

Rent a cab Scheme - The demand stands confirmed on the ground that the assessees were providing rent-a-cab operator service to different customers. In case of contract with one customer, namely, V service tax had been collected but not paid to government. In such circumstances, no prima facie case for total waiver thus the assesee was directed to pre deposit part of demand.

Summary

Issues:
1. Application for waiver of pre-deposit of service tax, interest, and penalty.
2. Classification of services provided as 'rent-a-cab' operator service or transport service.
3. Control over the vehicles hired out by the assessee.
4. Collection of service tax but non-payment to the Government.
5. Pre-deposit amount and conditions for waiver.

Analysis:
1. The judgment deals with an application for waiver of pre-deposit of service tax, interest, and penalty. The demand was confirmed as the assessee was providing 'rent-a-cab' operator service. The Tribunal considered the contentions presented by both sides and directed a pre-deposit of Rs. 35,00,000 within eight weeks, subject to verification, to waive the balance tax, interest, and penalty, with recovery stayed pending the appeal. Failure to comply would lead to vacation of stay and dismissal of the appeal without prior notice.

2. The issue of classifying the services provided as either 'rent-a-cab' operator service or transport service was contentious. The appellant relied on a previous Tribunal decision to support their argument. However, the Tribunal found the issue debatable based on other decisions and the terms of the contract. The control over the vehicles hired out was deemed to be with the customers, raising concerns about the nature of the services provided. The Tribunal highlighted instances where service tax was collected but not remitted to the Government, further complicating the classification.

3. The Tribunal observed that the terms and conditions of the contract indicated that the control over the vehicles, including buses, was with the customers to whom the vehicles were hired out. Specifically mentioning a contract with a customer where service tax was collected but not paid to the Government, the Tribunal found no prima facie case for a total waiver of pre-deposit. This aspect played a crucial role in the decision regarding the pre-deposit amount and conditions for waiver.

4. In light of the circumstances and facts of the case, the Tribunal directed the pre-deposit of a specified amount within a set timeframe to facilitate the waiver of the balance tax, interest, and penalty. The decision emphasized the importance of compliance with the directive to avoid adverse consequences such as the vacation of stay and dismissal of the appeal without prior notice. The judgment provided a detailed analysis of the issues involved, considering legal precedents and the specific details of the case to arrive at a reasoned decision.