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TMI Blog2016 (10) TMI 1188X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the Finance Act, 2012 inserted Section 66B in the Finance Act, 1994 which made clear that the service covered under the negative list (given in Section 66D) are not to be taxed. However, we are not considering the impact of these provisions as the period involved in the cases in hand is prior to 01.7.2012, the day when the concept of negative list was introduced. ‘Rent-a-cab scheme operator’ has to be a person who is engaged in the business of renting of cab - From the facts on record, it is clear that essential business of the appellants is plying the buses from one place to the other place(s), which are fixed in advance on regular basis - These appellants only on occasional basis [which one of the appellants say is only three per cent (3%) of their total operation] rent out their buses on specific demands from specific customers - service would not come under the expression 'rent-a-cab scheme operation'. Extended period of limitation - Penalty - Held that: - the issue is highly debatable and arguable and therefore the invocation of extended period can definitely be not sustainable - penalty also set aside. Appeal allowed - decided in favor of appellant. - Service Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 5. ST/1367/2011 01.10.2008 to 31.10.2009 11,25,804/- u/s 76 and ₹ 4,000/- u/s 77 6. ST/1368/2011 01.4.2008 to 30.09.2008 1,58,690/- u/s 76 and ₹ 1000/- u/s 77 7. ST/1369/2011 01.4.2008 to 30.09.2008 4,87,575/- u/s 76 and ₹ 3000/- u/s 77 8. ST/1370/2011 01.10.2008 to 31.12.2009 9,85,238/- u/s 76 and ₹ 3,000/- u/s 77 9. ST/440/2012 10/2009 to 03/2010 3,94,842/- u/s 76 and u/s 77 10 ST/439/2012 4/2009 to 09/2009 2,05,662/- u/s 76 and u/s 77 11. ST/2773/2012 01.11.2009 to 31.3.210 3,77, 697/-- u/s 76 and ₹ 2,000/- u/s 77 12. ST/25080/2013 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 65(91) of Finance Act, 1994, they being a person engaged in the business of renting of a cab . 2.1. The Revenue says that with effect from 1.6.2007, as per Section 65(105) of the Finance Act, 1994, the meaning of a cab is (i) a motor cab, or (ii) a maxicab, or (iii) any motor vehicle constructed or adapted to carry more than twelve passengers, excluding the driver, for hire or reward provided that the maxicab referred to in sub-clause (ii) or motor vehicle referred to in sub-clause (iii) which is rented for use by an educational body imparting skill or knowledge or lessons on any subject or field, other than a commercial training or coaching centre, shall not be included within the meaning of cab. 2.1.1. The Revenue says that with the amendment of the definition of cab with effect from 01.6.2007 any motor vehicle constructed or adapted to carry more than twelve passengers are also covered under the taxable service of Rent-a-Cab Scheme Operator Services and the corresponding taxable service means any service provided or to be provided to any person, by a rent-a-cab scheme operator in relation to the renting of a cab. 2.1.2. Revenue further says that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rator. (v) In the present cases, the appellants have collected the charges based on the actual number of kilometres run multiplied by the amount fixed per kilometre. However to fall under rent-a-cab there would be a fixed monthly rent and minimum number of kilometre would be fixed and crossing of such kilometre customer would be liable to pay extra. That is not in the present cases, accordingly it is very much clear that the appellants do not fall under rent-a-cab definition and, accordingly, the impugned orders require to be set aside. (vi) The taxable service definition in this regard is defined under Section 65(105)(o) of the Finance Act, 1994 which reads as under :- taxable service means any service provided or to be provided to any person, by a rent-a-cab scheme operator in relation to the renting of a cab. (vii) Accordingly, the main ingredients of the above service as per the above Section are : (a) the service provided to any person (b) the service provided by a rent-a-cab scheme operator (c) the service provided in relation to renting of cab. (viii) The rent-a-cab scheme operator is defined under Section 65(91) of Finance Act, 1994. The d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal areas. Their essential activities are plying their buses between the designated points on regular routes. In addition, occasionally they enter into casual contracts for the purpose of educational trips, election duties, pilgrimage etc. where they charge on kilometer basis. Their main objective and activities remain rendering services between one place(s) to other place(s) within their operation areas, which are fixed in advance and the beneficiaries are general passengers or common people who stay/live or are present in such areas. 8.1. We have to decide mainly the issue that wherever these appellants have provided their buses on individual contract basis - Whether such services could be classified as rent-a-cab service or not? In this regard we would be referring to the relevant provisions of the Finance Act, 1994. But before we refer to the said provisions of the Finance Act, 1994, it is to be noted that in the year 2012 on July 01, the concept of negative list was introduced in respect of levy of Service Tax and Section 66D of the Finance Act, 1994 came into force by its insertion in the said Act. An exemption Notification No. 25/2012-S.T. dated 20.6.2012 was issued an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shall not be included within the meaning of cab; The maxicab has been defined under Section 65(70) and motorcab has been defined under Section 65(71) of the Finance Act, 1994. The motor vehicle has been defined under Section 65(73) of the said Act which reads as under :- motor vehicle has the meaning assigned to it in clause (28) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988), which is : motor vehicle or vehicle means any mechanically propelled vehicle adapted for use upon roads whether the power of propulsion is transmitted thereto from an external or internal source and includes a chassis to which a body has not been attached and a trailer; but does not include a vehicle running upon fixed rails or a vehicle of a special type adapted for use only in a factory or in any other enclosed premises or a vehicle having less than four wheels fitted with engine capacity of not exceeding 25 cubic centimetres 8.2.1. From above provisions, it is clear that rent-a-cab scheme operator has to be a person who is engaged in the business of renting of cab. From the facts on record, it is clear that essential business of the appellants is plying the buses from on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the agreement also, we find that the appellant did not collect a monthly rent as observed by the Commissioner in his order. The charges are made on the number of kilometers actually run multiplied by the amount fixed per kilometer. In rent-a-cab scheme a monthly rent is fixed and minimum number of kilometer may also be fixed crossing which the customer may have to pay extra. If the number of kilometers falls below the number and even if it is substantially low, yet the customers would be liable to pay the entire rent. That is not the case here. Moreover as submitted by the learned counsel even in such cases where buses are given on kilometer basis, passengers have to be picked up from various points and dropped at the destination as in the case of stage carriage. Further, we also find that the show cause notice was issued in September, 2011 and the demand relates to the period substantial portion of which is time-barred. The discussion above would show that the issue is highly debatable and arguable and therefore the invocation of extended period can definitely be not sustainable. For the same reasons, imposition of penalties under various sections of Finance Act also cannot be s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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