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TMI Blog2017 (7) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee, levy of service tax is confirmed. However, quantum of levy may undergo amendment subject to consideration of abetment if permissible which is left to the ld. Adjudicating authority for examination in the light of the law, considering the argument of the assessee and also subject to production of evidence if any. Time limitation - Held that: - the appellant has collected the taxes but not having paid the same to the treasury, it loses all its right to further argue when its conduct of evasion was patent - However, considering that there was a confusion between the assessee and Revenue due to varied judgment of different High Courts, the levy of penalty is considerable under the section 80 of the Finance Act 1944. Appeal allowed by way of remand. X X X X Extracts X X X X X X X X Extracts X X X X ..... red to as "the Act") read with section 65(91) and 65 (20) of the said Act. According to her, relevant provisions are extracted in para B3 at page 11 of the adjudication order which reads as under: "65(105)(O) : any service provided or to be provided by a rent a cab scheme operator in relation to the renting of a cab. Also, as per Section 65(91) „Rent-a-cab scheme operator‟ means:- "any person engaged in the business of renting of cabs." and as per Section 65(20) "cab" means:- "(i) a motorcab, or (ii) a maxicab, or (iii) any motor vehicle construed or adapted to carry more than twelve passengers, excluding the driver, for hire or reward." 6. Assessee says that when a cab is rented under a scheme, the receipt therefrom cannot be taxed following the judgment of the Hon'ble High Court of Uttarakhand in the case of CCE Vs. Sachin Malhotra 2015 (37) STR 684 (Uttarakhand). That judgment brings out that the rent a cab scheme of 1989 is governed by Motor Vehicle Act 1988. The provision of the scheme has been discussed by the Hon'ble High Court in para 16 and 17 of the judgment as under: 16. What is sought to be taxed under the provisions, which we have adverted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces may be granted, renewed or revoked; (f) appeals against orders of refusal to grant or renew such licences and appeals against orders revoking such licences; (g) conditions subject to which motorcabs may be rented; (h) maintenance of records and inspection of such records; (i) such other matters as may be necessary to carry out the purpose of this section." 17. In terms of Section 75, a scheme has been framed by the Government, which is called Rent-A-Cab Scheme, 1989. It contemplates the licensing of the operator; the making of an application for the licence; the grant of the licence; and the duration of the licence. We noticed, no doubt, that Clause 9 contemplates collection of hire charges. It also provides for the duties and responsibilities of the hirers of motor cabs in Clause 10, which we consider to be relevant, and we, therefore, extract the same as under : "10. Duties and responsibilities of hirers of motor cabs. - (1) It shall be the duty of every hirer, to keep the holder of the licence informed of his movements from time to time. (2) If an individual or company has hired the vehicles as a leader of the tourist party, it shall be the duty of such leade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cle on the basis of a contract that he will pay the requisite hire charges for the period he uses the vehicle. Unlike the same, in the case of rent-a-cab, as is provided in the Motor Vehicles Act, the person is enabled to take the vehicle with him wherever he pleases, subject, no doubt, to the terms of the contract between the parties and he uses the vehicle as his own subject to his paying the rent. Though both, rent and hire, may, in a different context, have the same connotation; in the context of rent-a-cab scheme and hiring, we are of the view that they signify two different transactions. What the lawgiver has chosen fit to tax by way of imposition of Service Tax is only transaction relating to business of renting of cabs. It is also pertinent to bear in mind that, in the case of hiring, the hirer may refuse to provide the service to the prospective customer. We cannot accept the argument of the learned counsel for the appellant that the Court must ignore the provisions of Section 75 of the Motor Vehicles Act. We are of the view that, when the lawgiver introduced this new source of taxation, it must be treated as having been aware of the distinct concept of renting a cab for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand without any interest and penalty levied. 10. Further, the contention of the assessee is that the demands are time barred as no tax is payable by the assessee in view of confusion in the field of taxation. 11. Revenue on the other hand, submits that the taxing entry in the Finance Act 1994 has the object of taxing the services provided or to be provided to any person by the rent a cab scheme operator in relation to the renting of a cab and cab means any motor vehicle carrying more than 12 passengers excluding the driver for hire or reward. Taxation is on the services provided under the scheme. A person is engaged in the business of renting a cab is an operator of motor vehicle since cab means a "motor cab", or a "maxi cab" or "any motor vehicle constituted or adapted to carry more than 12 passengers excluding the driver for hire or reward". The adjudicating authority has analysed the mode of working of the assessee and the service recipient in the Tables aforesaid and having noted that vehicle was specifically meant for service recipient to make use thereof having possession and control over that and no other person was allowed to use the said vehicle during the tenure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contract between the parties made the assessee an operator of renting the vehicle and liable to service tax. The judgment of Hon'ble High Court of Uttarakhand in the case of Sachin Malhotra (Supra) supports the case of revenue in view of the fundamental principle of renting discussed in para 18 of the judgment as extracted herein before. 17. There is no doubt that appellant has realized certain amount of taxes and not paid that into the treasury. It may be stated that the vehicle in the present case having more than 12 passengers capacity and were hired in specific terms with the control and possession of the vehicle remaining with the user of the vehicle to transport their employees, that established the case of renting of motor vehicle for a consideration. 18. Incidence of the levy having arisen in the present case in relation to renting of motor vehicle services provided by the assessee, levy of service tax is confirmed. However, quantum of levy may undergo amendment subject to consideration of abetment if permissible which is left to the ld. Adjudicating authority for examination in the light of the law, considering the argument of the assessee and also subject to produc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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