SHIVA TRAVELS Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) ALL these appeals are directed against the orders of the Commissioner (Appeals) upholding the order in original by which the appellants are required to pay service tax and penalties under the relevant provisions of Finance Act, 1994.

(2.) THE appellants were engaged in providing service of rent -a -cab operator, according to Revenue. Since the appellants were not registered under the Service Tax Laws, and no service tax was deposited, show cause notice was issued on the ground that they had evaded payment of service tax amounts mentioned in the notice. According to the Revenue, the assessee had admitted that service tax was payable by them and that they will try to pay the service tax that was due, alongwith interest. According to the assessees, there was a difference in Rent -a -cab scheme and Taxi permit scheme under the Motor Vehicles Act 1988, and that Taxi permit holder cannot work as a rent -a -cab operator without obtaining a license for Rent -a -cab scheme. It was also the case that since they were not a licensee under rent -a -cab scheme; no service tax was required to be collected from them.

(3.) THE authorities below found that under the Finance Act, 1994 as amended, the requirement of operators to be registered under Section 75 of the Motor Vehicle Act, 1988 in order to make them eligible as 'rent -a -cab' scheme operator, was dispensed with from 16 -10 -1998. As a result of such change in the definition, after 16 -10 -1998, a person to qualify as rent -a -cab scheme operator, had to simply engage in the business of rent -a -cab, and the requirement to hold a license had been dispensed with. The service provided on rent -a -cab operator was exempted from service tax upto 31 -3 -2000. Therefore, from 1 -4 -2000, such operators were covered under the definition of rent -a -cab scheme operator and were liable to pay service tax. It was also noticed by the authorities below that the Hon'ble High Court of Madras while upholding the constitutional validity of service tax on 'tour operators' and 'rent -a -cab scheme operators', in Secretary, Federation of Bus Operators Associations of Tamil Nadu v. Union of India held that tax on service was levied on a person if he was engaged in the business of engaging taxis for customers and giving them service even without owning or plying the vehicle. It was also held that if the person was plying cabs and services were provided by him to any person in relation to renting cabs, such services become taxable service and holding license under Rent -a -cab scheme was not required for levying service tax. The appeal against the above decision of Hon'ble Madras High Court came to be dismissed by Hon'ble Supreme Court as noticed by the lower authorities 2003 (157) E.L.T. A -144). It however, appears that the appeal was dismissed by the Hon'ble Supreme Court on the ground of not explaining the delay and not on merits.