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2013 (3) TMI 274 - AT - Service TaxRent-a-cab service versus hire charges - held that - The records show that the vehicles were maintained by the appellant in accordance with the specifications laid down by the service recipient. The activity, prima facie, amounts to operation of rent-a-cab scheme by the appellant for the benefit of service recipient. For this service, the appellant was collecting rent based on the seating capacity as well as the kilometers run by each vehicle. There is nothing on record to show that the appellant was transacting a business with the other company which was of a different nature known to the trade than rent-a-cab operator s service. The decision of the Hon ble High Court in the case of 2010 (4) TMI 283 - PUNJAB & HARYANA HIGH COURT is clearly in support of the Revenue. - Prima facie against the assessee - pre deposit ordered partly.
Issues Involved:
1. Waiver of predeposit and stay of recovery in respect of service tax, interest, and penalty. 2. Challenge to the demand under 'rent-a-cab service' by the appellant. 3. Interpretation of the nature of the appellant's activity in relation to rent-a-cab service. 4. Application of relevant legal precedents to determine tax liability. Analysis: Issue 1: Waiver of predeposit and stay of recovery The appellant sought waiver of predeposit and stay of recovery concerning service tax, interest, and penalty. The Tribunal directed the appellant to predeposit an amount of Rs.2.5 lakhs within six weeks and report compliance. Upon compliance, there would be a waiver and stay in respect of penalty, interest, and the remaining service tax amount. Issue 2: Challenge to the demand under 'rent-a-cab service' The appellant challenged the demand under 'rent-a-cab service' for the period from 01/06/2007 to 13/09/2008. The appellant claimed that the activity of allowing M/s. AT & S India Pvt. Ltd. to use vehicles against payment of "hire charges" based on kilometers run did not fall under rent-a-cab service, thus asserting no tax liability. Issue 3: Interpretation of the nature of the appellant's activity The Tribunal analyzed the agreement, bill, and purchase order between the appellant and M/s. AT & S India Pvt. Ltd. It was observed that the appellant collected rent based on seating capacity and mileage of vehicles used by the company, maintaining vehicles as per recipient's specifications. The Tribunal found the activity to prima facie amount to operating a rent-a-cab scheme for the service recipient, supporting the Revenue's view. Issue 4: Application of legal precedents The Tribunal considered legal precedents cited by both sides. The appellant relied on decisions in R.S. Travels vs. CCE, Meerut and Sri Sai Krishna Travels vs. CCE, Visakhapatnam to support their claim. However, the Revenue cited CCE, Chandigarh vs. Kuldeep Singh Gill, emphasizing the appellant's operation of a rent-a-cab scheme as defined under Section 65(91) of the Finance Act, 1994. The Tribunal found the decision in Kuldeep Singh Gill case supportive of the Revenue's stance, leading to the direction for predeposit by the appellant. In conclusion, the Tribunal upheld the demand under 'rent-a-cab service' based on the nature of the appellant's activity and legal precedents, requiring predeposit while granting waiver and stay for penalty, interest, and the remaining service tax amount upon compliance.
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