By TIOL News Service

MUMBAI, OCT 22, 2013: THE appellant was denied the benefit of notfn. 39/97-ST as available to a “tour operator” and a demand of Rs.4,49,021/- was confirmed along with the usual paraphernalia on the ground that the appellant is providing “rent-a-cab operator service”.

As the lower appellate authority upheld the demand, the appellant is before the CESTAT and submits that although they are engaged in the business of rent-a-cab, they had in the year 1997 registered with the Revenue as provider of ‘tour operator' service; that they were not covered even under ‘rent-a-cab' service as the law at the material time required that the service provider should have 50 cabs and this mandatory requirement was removed w.e.f 01/04/2000 inasmuch as the definition of the term"Rent-a-Cab Scheme Operator" as per Section 65 (38) of Finance Act, 1994 was amended to read "any person engaged in the business of renting of cabs" whereas prior to the amendment, scope of the said term was limited to a person who was holding a licence under the Rent-a-Cab Scheme, 1989, framed by the Central Government, under the Motor Vehicle Act, 1988, and under the said scheme, Licence is granted only in the case where a person has a minimum of 50 cabs. The appellant also raised the bogey of the demand being hit by limitation.

The Revenue representative relied upon the findings of the lower authority and submitted that as the appellants are not having a tourist bus, the appellants are not covered under the scope of tour operator but the appellants were wrongly paying service tax under the category of tour operator by availing the benefit of the Notification, though the appellants are providing rent-a-cab service.

The Bench observed -

"6. We find that the appellants are not having any tourist bus. The appellants are giving only cabs. Therefore, we find that the appellants are not covered under the scope of tour operator service. In view of this, the appellants are not entitled for the benefit of Notification 39/97-ST which covers only tour operator service. As the appellants are providing rent-a-cab service, therefore we find no infirmity in the impugned order whereby the demand is confirmed. In respect of penalty, we find that as the appellants are registered as a provider of tour operator and paying tax accordingly and also filing statutory returns, therefore as per the provisions of Section 80 of the Finance Act, we find that it is not a case for imposition of any penalties. The penalties imposed under the impugned order are set aside. The appeal is disposed of in above terms."

Hopefully, this is not the last that we hear of this case, after all…there is something called status!

(See 2013-TIOL-1556-CESTAT-MUM)