By TIOL News Service

MUMBAI, DEC 29, 2015: THE appellant Maharashtra State Road Transport Corporation is engaged in providing buses on hire to various agencies / persons on contract basis.

The adjudicating authority held that service tax is payable on the services provided under the category of ‘Rent-a-Cab' service. Two demands of Rs.6,29,689/- and Rs.20,10,388/- for the period 7 th June to March 2009 in respect of Sindhudurg Division and Ratnagiri Division respectively were confirmed by the Adjudicating Authority. Penalties were also imposed.

In appeal, the Commissioner (Appeals) held that the services are covered under the category of “Tour Operator' service. Furthermore,it was observed that the services have been performed in respect of educational trips by schools which are excluded from the purview of the tour operator service.

Revenue is in appeal against this order on the ground that the Commissioner (Appeals) has not explained how the services are covered under the tour operator service.

The Bench observed -

"…At the outset, we find that the grounds of appeal have totally ignored the main finding of the Commissioner that Tour operator service and Rent-a-Cab service are exempted if the journeys are organized or arranged for use by an educational body. For convenience, the definition of ‘Tour Operator' service and ‘Rent-a-Cab' are reproduced below:

(20) "cab" means -

(i) a motor cab, or

(ii) a maxi cab, or (iii) any motor vehicle constructed or adapted to carry more than twelve passengers, excluding the driver, for hire or reward:

Provided that the maxi cab 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;

(115) "tour operator" means any person engaged in the business of planning, scheduling, organising or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made thereunder.

Explanation.- For the purposes of this clause, the expression "tour" does not include a journey organised or arranged for use by an educational body , other than a commercial training or coaching centre, imparting skill or knowledge or lessons on any subject or field;

We find that the finding of the Commissioner (Appeals) that “the appellants have submitted details wherein it is very clear that the vehicles were hired by schools and colleges for trips”. This finding has not been controverted by Revenue. Therefore the appeal is liable to be dismissed."

The impugned order was upheld and the Revenue's appeals were dismissed.

(See 2015-TIOL-2808-CESTAT-MUM)