VIJAY TRAVELS Vs. COMMISSIONER OF SERVICE TAX, AHMEDABAD

JUDGEMENT

(1.) SERVICE tax of Rs. 74,10,217/ - stands confirmed against the appellant by treating the services provided by them during the period 01.04.01 to 31.03.04 as services of "rent -a -cab". In addition penalty of identical amount stands imposed under section 78 of the Finance Act, 1994 and of varying amount under other sections.

(2.) AS per facts on record appellant entered into a contract with M/s. Gujarat Secondary Education Board (hereinafter referred to as GSEB) for transportation services at the time of their examination, for transportation of papers/answer sheets, examiners etc. For providing the said services, appellant uses his own cars as also takes them on rent from the other persons. First such tender was approved by M/s. GSEB in 1995 when no service tax was leviable. The same was approved for a period of two years and subsequently extended from time to time.

(3.) LEARNED advocate, Shri Devan Parikh, appearing for the appellant has drawn our attention to the contract entered into between the appellant and M/s. GSEB and has stressed the point that the appellant was not in fact renting a cab to the said M/s. GSEB but was to provide the vehicle, whenever required by them against consideration of payments on the basis of meter reading. This becomes clear from clause -2 of the contract which required the occupant of the vehicle to write down reading of meter at the start of the journey and last meter reading in the register and to bill the same accordingly. As such by relying upon the Tribunal's decision in the case of Kuldip Singh Gill v. CCE, [2005] 2 STT 34 (New Delhi - CESTAT) learned advocate submits that where the transport services are being provided against payment on per kilometer basis and there was no renting of cab, the service cannot be held to be classifiable under "rent -a -cab" service. The said decision was subsequently followed by another Bench of the Tribunal in the case of R.S. Travels v. CCE, [2008] 15 STT 437 (New Delhi - CESTAT) where a difference between renting and hiring was made and hiring of the vehicle was held to be not covered under the said service. Learned advocate further submits that though reliance was placed upon the above decision of the Tribunal, Commissioner has made distinction on flimsy ground by observing that in the case of Kuldip Singh Gill (supra) the vehicle supplied was motor cab and maxi cab and not mini buses or matadors as is the case in the present matter. Learned advocate also assailed the impugned order on the point of limitation by submitting that the service tax being a new levy introduced with effect from 01.04.2000, they were under bona fide belief that hiring of vehicles does not call for any payment of service tax. They submit that if service tax was payable, the same was to be collected by them from GSEB and deposited with the Revenue, in which case there cannot be any intent on their part to evade payment of service tax. In any case; first show -cause notice having been issued on 20.10.05, the subsequent notices invoking longer period mere not legal and sustainable on the point of time bar.