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TMI Blog2018 (5) TMI 1134X X X X Extracts X X X X X X X X Extracts X X X X ..... r the control of the Appellant. Apparently the Appellant is required to bear the cost of running the buses so hired, including the salary to be paid to the drivers and they are remunerated on the basis of kilometer run only - the possession and control of the vehicle has remained with the Appellant and hence cannot be termed as renting of cab/ bus. Time Limitation - Held that: - the Appellants were filing Service tax returns showing the services as exempted services. In such case when the services rendered by the Appellant were in the knowledge of the revenue and there is no reason to hold that the Appellant intended to suppress the nature of services, in that case no malafide intention can be attributed to the Appellants - extended period not invokable. Appeal allowed - decided in favor of appellant. - Appeal Nos. ST/90074,90070/2014 - ORDER NO. A/86366-86367/2018 - Dated:- 11-5-2018 - Hon ble Mr. Ramesh Nair, Member (Judicial) And Hon ble Mr. C.J. Mathew, Member (Technical) Shri Prasad Paranjape, Advocate, for appellant Shri Rishi Goyal, Additional Commissioner (AR), for respondent ORDER Per : Ramesh Nair The brief facts of the case are that the Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... un supra. Also that in said judgment the order of Hon ble High Court in case of Sachin Malhotra was differentiated. He further submits that the Appellant s plea of classification of service under Tour Operator is misplaced. The demands are not time barred. 4. We have carefully considered the submissions of the rivals and perused the records. The Appellant during the period has given the buses on hire to the various Transport Corporations who were paying charges on Kilometer basis to the Appellant. The revenue intended to tax the said transaction under the category of Rent A Cab Scheme Operator and demand service tax thereupon. We find that in the present case the Appellants were giving buses on hire to the corporations. They were not renting the cabs to the corporation. The control and the possession of the buses remained with the Appellant. The Hon ble High Court of Uttarakhand in case of CCE Vs. Sachin Mehrotra 2015 (37) STR 684 and in case of CCE Vs. R S Travels has extensively dwelled upon the issue. The Hon ble Court while differentiating between renting and hiring reached to the conclusion that unless the control of the vehicle is made over to the hirer and he is given po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enewal and revocation of such licences; (b) form of application and form of licences and the particulars to be contained therein; (c) fee to be paid with the application for such licences; (d) the authorities to which the application shall be made; (e) condition subject to which such licences 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, ext ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; and the customer merely makes use of the vehicle by travelling in the vehicle 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were cited. We note that the judgment relied upon in re PB Bobde did consider the submissions of Revenue relying on those very judgments before going on to hold that possession and control of the vehicle are the essence of the difference between renting and hiring. In view of the chronological proximity of the judgment of the Hon ble High Court of Uttarakhand In Re : Sachin Malhotra, reaffirmed in Commissioner of Customs Central Excise, Meerut-I v. R.S. Travels [2015 (38) S.T.R. 3 (Uttarakhand)], we cannot but continue to be guided by : 18. A perusal of Clause 10 would re-enforce us in the view that we are taking that, under the rent-acab scheme, the hirer is endowed with the freedom to take the vehicle, wherever he wishes, and he is only obliged to keep the holder of the licence informed of his movements from time to time. When a person chooses to hire a car, which is offered on the strength of a permit issued by the Motor Vehicles Department, then the owner of the vehicle, who may or may not be the driver, will offer his service while retaining the control and possession of the vehicle with himself. The customer is merely enabled to make use of the vehicle by travelling ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ab for which there is provision in the Central Legislation, namely, Section 75 of the Motor Vehicles Act and also a scheme stood framed as early as in 1989. We are, therefore, of the view that, unless there is control, which is passed to the hirer under the rent-a-cab scheme, there cannot be a taxable transaction under Section 65(105)(o), read with Section 65(91) of the Service Tax Act. 19. We are, therefore, unable to subscribe to the view taken by the Punjab Haryana High Court (supra), which is relied on by the learned counsel for the appellant. We would think that the said court has not considered the aspects, which we would think were absolutely relevant in arriving at a conclusion. 7. There is, we find, another compelling logic for, by any other interpretation, would render the taximeter cab-driver/operator also liable to tax. That such has been the intent of the Legislature appears far-fetched and we hold that vehicles contracted out in return for payment on actual usage is not taxable under Section 65(105)(o) of Finance Act, 1994. Revenue has not appealed the finding that contracting the use of buses do not fall within the ambit of taxation for rendering tour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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