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2023 (8) TMI 850 - AT - Service TaxTime limitation - Levy of Service Tax - Rent a Cab operator Service - hiring of Buses to Maharashtra State Road Transport Corporation (MSRTC) - penalties - HELD THAT - There is no dispute that the issue involved interpretation of law regarding taxability of the service of hiring of buses. On this issue various cases have been decided and though finally it was held that the hiring of the buses also falls under rent a cab service but considering the bonafide of the assessee the demand is set aside on the ground of time barred. This has been considered in the case of COMMISSIONER OF SERVICE TAX VERSUS VIJAY TRAVELS 2015 (1) TMI 809 - GUJARAT HIGH COURT wherein the Hon ble Gujarat High Court while dealing with the demand for the longer period upheld the order of the Tribunal to the extent the demand was set aside on time bar. Even though the demand on merit was sustainable, but demand for the extended period was set aside. Considering this legal position is the present case since entire demand is beyond normal period the same is not sustainable - the penalties are also not sustainable. The impugned order is set aside and appeal is allowed.
Issues Involved:
The issue involved in the present case is whether the appellant is liable to pay Service Tax on the hiring of Buses to Maharashtra State Road Transport Corporation (MSRTC) under the head of 'Rent a Cab operator Service'. Details of the Judgment: Issue 1: Liability to Pay Service Tax The appellant believed they were paying service tax under 'rent a cab service' and 'Tour operator service' in good faith, thinking that hiring the vehicle is different from rent a cab service and not liable for service tax. It was argued that hiring of the vehicle to MSRTC could fall under 'Supply of Tangible Goods Service', but since the demand was not made under that head, the service tax demand was deemed unsustainable. The appellant's bonafide belief was supported by various judgments cited, indicating that the demand for the extended period was time-barred, as the show cause notice was issued beyond the stipulated period. The absence of malafide intent led to the submission that penalties under Sections 76, 77 & 78 of the Finance Act 1994 should be set aside invoking Section 80 of the Finance Act 1994. Issue 2: Interpretation of Law After considering the submissions from both sides, the Tribunal found that the issue involved interpretation of law regarding the taxability of the service of hiring buses. While it was concluded that hiring of buses falls under 'rent a cab service', the demand was set aside on the grounds of being time-barred, considering the bonafide belief of the assessee. Citing the case of Vijay Travels, it was highlighted that deliberate act of suppression or malafide intent was not present, thus the demand for the extended period was not sustainable. The Tribunal's decision was supported by the case of Pearl Travels, where the demand for the extended period was set aside due to lack of ambiguity regarding taxability under Business Support Service. Conclusion: In light of the legal precedents and the absence of malafide intent, the demand for the extended period was set aside, rendering the penalties unsustainable. The impugned order was thus set aside, and the appeal was allowed. *(Pronounced in the open court on 17.08.2023)*
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