2018 (2) TMI 479 - AT - Service Tax

Rent-a-cab service - the appellant was hiring vehicles to BSNL - Held that - The Tribunal in the case of Rahul Travels Vs CCE 2016 (11) TMI 1294 - CESTAT MUMBAI has held that hiring of cars and buses as contract carriage on payment based on their usage as per kilometre basis would not fall under the definition of Rent-a-Cab service or under Tour Operator service - demand set aside. Levy of service tax - construction services within the period prior to 01.06.2007 - Held that - The Hon ble Apex Court in the case of Commissioner, Central Excise & Customs Versus M/s Larsen & Toubro Ltd. and others 2015 (8) TMI 749 - SUPREME COURT has held that works contract service prior to 01.06.2007 cannot be subject matter to levy of service tax - demand set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand of service tax on Rent-a-Cab Service and Construction Service under works contract.
2. Interpretation of the definition of "Rent-a-Cab Services" and "Construction services" for service tax purposes.
3. Applicability of judgments in similar cases to the present situation.
4. Validity of demand for services rendered prior to the introduction of "Works Contract" under Section 65 (105) (zzzza) of the Act.

Analysis:
1. The appeal involved two issues: demand of service tax on Rent-a-Cab Service and Construction Service under works contract provided by the appellant to BSNL during specific periods. The original authority and Commissioner (Appeals) confirmed the demand along with penalties, leading to the appeals before the tribunal.

2. The appellant argued that hiring vehicles for BSNL did not fall under the definition of "Rent-a-Cab Services" during the relevant period. They relied on a judgment by the Hon'ble High Court of Uttarakhand in a similar case. The tribunal, considering this argument and precedent, held that the demand under the category of Rent-a-Cab service was unsustainable.

3. Regarding the construction services, the period involved was prior to the introduction of "Works Contract" under Section 65 (105) (zzzza) of the Act. The appellant cited a judgment by the Hon'ble Apex Court in a relevant case. The tribunal, following the precedent, concluded that the demand raised for construction services was also not sustainable.

4. The tribunal found that the activities of hiring vehicles and providing construction services did not align with the definitions under the relevant tax laws for the periods in question. Based on the legal interpretations and judgments cited, the impugned orders confirming the demand were set aside, and the appeals were allowed with consequential relief, if any, as per law.