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TMI Blog2016 (6) TMI 1268X X X X Extracts X X X X X X X X Extracts X X X X ..... f stage carriage permits. 1.3 It appeared to department that various chartered/contract/tour services provided by APSRTC to the public fall under the " tour operator" services as defined under the clause (115) of Sec.65 of the Finance Act, 1994 and that APSRTC were providing various tour operator services and evading payment of Service Tax. 2. Show cause notices dated 07-02-2006, 02-04-2007, 15-10-2008, were issued to appellant/assessee proposing recovery of service tax on the amounts received by them on aforesaid activities respectively for different periods, which were confirmed by respective adjudicating authorities. Hence appeals Nos.284/2007, 366/2008, and 379/2009 by assessee. Department has also come in appeal by filing appeal No.312/2007 against dropping of demand by adjudicating authority for the period 4/2000 to 9/2004. The summary of the details of the Show cause notice, demand of service tax and period involved in the appeals are given in the following table. S. No. Appeal No. SCN Period OIO Demand Confirmed penalties 1. ST/284/2007 8/2006 dt. 7.2.2006 10.09.04 to 3/2005 (demand from 4/2000 to 9.9.04 dropped) 1/2007 dt. 21.3.07 4,01,10,786 Rs.1000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 2007(79) RLT 774(CESTAT-Ahmd). 2) Praseetha Suresh vs CCE Thiruvananthapuram, 2006(3) STR 777(Tri.Bang) 3.3 The learned Commissioner has erred in demanding service tax w.e.f 10-09-2004 under a wrong impression that with effect from 10-09-2004 the requirement of the use of tourist vehicles by tour operators has been dispensed with and that the judgment of the Hon'ble Madras High court in the case of Secretary, Federation of Bus Operators Association or Tamil Nadu Vs Union of India, wherein it was categorically held that in order ot levy service tax on stage carriage operators /contract carriage operators, the vehicles used must be tourist vehicles as contemplated under section 2(43) of the M.V. Act read with Rule 128 of M V Rules, would not come in the way to levy service tax on tour operators who are not using tourist vehicles for the purpose of tour. However, as already stated above, the circular dated 17-09-2004 is very clear to the effect that the amendment made in the definition of "tour operator" in the budget 2004, was with reference to extending the scope of package tour operators and not with reference to the normal tour operators where the condition of use of to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he business of planning, scheduling, organizing or arranging Tours by any mode of transport which is precisely the activity undertaken by the appellant. In regard to the appeal filed by department the learned AR submitted that Commissioner has erred in dropping the demand prior to 10-09-2004 without verifying whether the vehicles indeed do not conform to Rule 128 of the motor Vehicle Rules. He finally urged that the transportations having been done under a contract whether explicit or implicit, the activity would attract service tax being contract carriages and thus falling within the definition of Tour operator. 6. We have heard both sides at length and also perused the records carefully. Before we proceed to analyse the issue under consideration, the relevant provisions of the Finance Act, 1994 are extracted as under for better appreciation of the issue. Term defined Reference to the Finance Act, 1994 Definition Tour Section 65(50) "tour" means a journey from one place to another irrespective of the distance between such places. Tourist vehicle Section 65(51) "Tourist vehicle" has the meaning assigned to in clause 43 of section 2 of the Motor Vehicles Act, 1988. Tou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istance or b) from one point to another an d in either case, without stopping to pick up or set down passengers not included in the contract anywhere during the journey. 7. From the above definitions it emerges that for the entire period of the dispute, viz; 01-04-2000 to 2007-08, irrespective of the amendments to the definition of "tour operator" in the finance Act,1994 the activities of the appellant would not attract service tax under the said service category. To be covered under the definition of "Tour operator" the person should be engaged in operating tours in a tourist vehicle covered by a permit. Tourist vehicle has a meaning assigned to it in Section 2 (43) of the Motor Vehicles Act, 1988 which states that a contact carriage constructed or adapted or equipped or maintained in accordance with prescribed specifications. The specifications are provided in Rule 128 of the Motor Vehicle Rules. The departments do not have a case that the buses of the assessee used for carrying passengers as per contract to destinations conform to such specifications so as to make them fall within the definition of contract carriages. It is not disputed that the vehicles used by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been picked up as it is by the Finance Act, means a contract carriage constructed or adapted and equipped or maintained in accordance with such specifications as may be prescribed more particularly the specifications prescribed under Rule 128 of the Motor Vehicles Rules. Therefore, this ruling will not help the petitioners to suggest that a vehicle covered under Section 72(2)(xvii) merely for that reason or merely because it is having permit under Section 88(8) of the Motor Vehicles Act for its occasional use can never become a tourist vehicle. A plain reading of the provisions of the Motor Vehicles Act says that any such vehicle which answers the description of the tourist vehicle under Rule 128 and which would run under a contract would become a tourist vehicle and once it becomes a tourist vehicle so long as it is being used under any permit under the Motor Vehicles Act, by a person who is engaged in the business of operating the tours then, the requirement of the Finance Act would be complete. 25. It must be remembered that in the aforementioned decision, the Apex Court was considering the question as to whether the petitioner was excluded because of the scheme and whether t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) held that the service provided by the respondent did not fall within the definition of tour operator and accordingly set aside the lower adjudicating authority order. Aggrieved, Revenue filed this appeal. 3.?The contention of the appellant is that the Commissioner (Appeals) has relied upon certificate issued by Regional Transport Authority, Rajkot for bringing the vehicles used by the respondent out of the purview of definition of tourist vehicle as defined in the Section 2(43) of the Motor Vehicle Act, 1988 at the conclusion arrived at by the appellate authority was prima facie wrong and he has overlooked that the lower adjudicating authority has personally examined the vehicles and arrived at conclusion that the vehicle predominantly covered the specification made in Rule 128 of Motor Vehicle Rules, 1988. They also placed reliance on the decision referred supra wherein the Hon'ble High Court has decided the issue of requirement of tourist permit in favour of Revenue. They also placed reliance on decision of High Court of Madras in the case of Sri Pandyan Travels v. CCE, Chennai reported in 2006 (3) S.T.R. 151 (Mad.) = 2004 (163) E.L.T. 409 (Mad.). 4.?We find that the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er (Appeals)' order is upheld and Revenue's appeal is dismissed. 10. Though an appeal was preferred by department against this Tribunal order, however the same was dismissed by the Hon'ble Apex Court in 2012 (27) STR J79 (S.C.). Similar view has been taken in Jai Somnath Transport V CST, Mumbai 12016 (41) STR 660 (Tri- Mum) 4.7?Revenue, it appears, is confusing the words "Tourist permit" and "Tourist vehicle" and reading the word "permit" to mean the same as Tourist permit. Here too the judgment in Secy. Federn. of Bus Operators Association of T.N. (supra) clarifies the matter beyond doubt. It was held therein that "29. It, therefore, cannot be said that the permit contemplated under Section 65(52) of the Finance Act is a tourist permit alone contemplated under the Motor Vehicles Act or the rules framed thereunder. The argument is obviously based on the faulty logic that in Section 65(51) and (52) of the Finance Act the term "tourist vehicle" is used and the Motor Vehicles Act provides for the "tourist permit" under Section 88(9) read with Rules 82 to 85 or under 1993 Rules only for "tourist vehicles" and therefore, any "tourist vehicle" must have a "tourist permit". The logic i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch as S.K. Travels and Buthello Travels, and the SCN only referred to the second part of the definition even for the period post-10-9-2004. The findings by the Commissioner in the Orders in respect of these parties and in the case of Jai Somnath do not explain at all how and whether the activity is covered by the first part of the definition. In such cases the appeals fail as held in Para 4 above. 5.1?In other cases we may examine whether the appellants are engaged in the business of planning, scheduling, organizing or arranging tours. We have seen the Agreements between appellants and their clients. We find that the appellants have only planned for providing vehicles of a specific capacity with a particular schedule. We also note that at the time of expansion of the definition of Tour Operator on 10-9-2004, C.B.E. & C. Circular No. 80/10/2004-S.T., dated 17-9-2004 clarified that while the existing levy on tour operators engaged in operating tours in tourist vehicles remain as such, in case of a package tour (which are planned, scheduled, organized or arranged by tour operators), the scope of the levy is being extended by removing the limitations regarding transportation by touri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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