2016 (4) TMI 66 - AT - Service Tax

Classification - Providing buses for hire to various agencies/persons on contract basis - Adjudicating Auhority classified the services under the category of Rent-a-Cab service but Commissioner (Appeals) covered it under the category of Tour Operator service as the services have been performed in respect of educational trips of schools - Held that - the grounds of appeal have totally ignored the main finding of the Commissioner that tour operator service and Rent-a-Cab service are exempted if the journeys are organized or arranged for use by an educational body. As the appellants have submitted details wherein it is very clear that the vehicles were hired by schools and colleges for trips and this finding has not been controverted by Revenue. - Decided against the revenue

Summary

Issues:
1. Whether the services provided by the appellants fall under Rent-a-Cab service or Tour Operator service.
2. Whether the educational trips organized by schools are exempted from the purview of tour operator service.

Analysis:
1. The case involved an appeal by the Revenue against an Order-in-Appeal confirming service tax liability on the services provided by the appellants, who offered buses for hire on a contract basis. The Adjudicating Authority held that the services fell under Rent-a-Cab service as per Section 65(20) of the Finance Act. The Commissioner (Appeals) disagreed, classifying the services under Tour Operator service as per Section 65(115), noting that the vehicles were engaged in tours. The Revenue challenged this classification, arguing that the Commissioner did not explain how the services fit under tour operator service.

2. The Tribunal examined the definitions of "cab" and "tour operator" under the Finance Act. It was noted that under the definition of "cab," vehicles rented for use by educational bodies imparting skill or knowledge are excluded. The definition of "tour operator" explicitly excludes journeys organized for educational bodies other than commercial training centers. The Commissioner (Appeals) found that the vehicles were hired by schools for educational trips, a fact not disputed by the Revenue. Consequently, the Tribunal upheld the Commissioner's decision, dismissing the Revenue's appeals.

In conclusion, the Tribunal affirmed that the services provided by the appellants were exempted under the tour operator service due to the educational nature of the trips organized by schools. The judgment highlights the importance of understanding and applying the definitions and exclusions provided under the relevant legal provisions to determine the tax liability accurately.