VISHAL ENTERPRISES Vs. COMMISSIONER OF CENTRAL EXCISE, MYSORE

JUDGEMENT

(1.) THIS application filed by the appellant seeks waiver of pre -deposit and stay of recovery in respect of Service Tax, interest thereon and a penalty. The appellant has been asked to pay an amount of Rs. 5,01,510/ - towards Service Tax and Education Cess under the head rent -a -cab service for the period from 1 -6 -2007 to 13 -9 -2008. There is another demand of Rs. 1,50,894/ - which is under the head manpower recruitment and supply agency service and for the period from 16 -6 -2005 to 13 -9 -2008, which demand has been honoured by the appellant. The demand under rent -a -cab service is under challenge. The learned consultant for the appellant submits that they purchased certain vehicles from M/s. AT&S India Pvt. Ltd. and allowed the said company to use those vehicles against payment of what was called hire charges based on the kilometers run during the material period. On these facts, it is claimed that the activity was not covered by rent -a -cab service and hence there was no tax liability for the appellant. In this connection, the learned consultant relies on the Tribunals decision in the case of R.S. Travels v. CCE, Meerut [2008 (12) S.T.R. 27 (Tri. Del.)] and also on the decision in Sri Sai Krishna Travels v. CCE, Visakhapatnam [2010 (18) S.T.R. 220 (Tri. Bang.)]. Reliance has also been placed on Down Town Travels Pvt. Ltd. v. CCE, Ahmedabad (Final Order dated 22 -7 -2011) in Appeal No. ST/651/2011.

(2.) PER contra, the learned Superintendent (AR), claiming support from CCE, Chandigarh v. Kuldeep Singh Gill [2010 (18) S.T.R. 708 (P and H)], submits that the appellant was rendering rent -a -cab service to the aforesaid company inasmuch as they were effectually operating rent -a -cab scheme as defined under Section 65(91) of the Finance Act, 1994.

(3.) WE have considered the submissions by both sides, apart from perusal of the records which include the relevant agreement executed between the appellant and M/s. AT and S India Pvt. Ltd., a bill raised on that company by the appellant and the connected purchase order. A close perusal of these records, prima facie, indicates that the appellant was collecting rent from the aforesaid company on the basis of the seating capacity and mileage of the vehicles which were allowed to be used by the said company for a certain period. The records show that the vehicles were maintained by the appellant in accordance with the specifications laid down by the service recipient. The activity, prima facie, amounts to operation of rent -a -cab scheme by the appellant for the benefit of the service recipient. For this service, the appellant was collecting rent based on the seating capacity as well as the kilometers run by each vehicle. There is nothing on record to show that the appellant was transacting a business with the other company which was of a different nature known to the trade than rent -a -cab operators service. The decision of the Honble High Court in the case of Kuldeep Singh Gill (supra) is clearly in support of the Revenue. This decision rendered on 23 -4 -2010 is, prima facie, supportive of the view taken in the impugned order. Therefore, there will be a direction to the appellant to pre -deposit an amount of Rs. 2.5 lakhs (Rupees two lakhs and fifty thousand only) within six weeks and report compliance to the Assistant Registrar on 11 -7 -2012. Assistant Registrar to report on 18 -7 -2012. Subject to due compliance, there will be waiver and stay in respect of penalty and interest and balance amount of Service Tax.