COMMISSIONER OF CENTRAL EXCISE Vs. SURESH KUMAR ADVANI

JUDGEMENT

(1.) THE respondent during the period of dispute i.e. April, 2000 to August, 2002 and September, 2005 to November, 2005 provided buses to M/s. Nahar Spinning Mills Ltd. for picking up of their employees from various places for bringing them to the factory and thereafter dropping them back. The department was of the view that the services provided by the respondent is tour operator's Service Taxable under Section 65(105)(n) read with Section 65(113), 65(114) and 65(115) of the Finance Act, 1994. Accordingly, after issue of show cause notice, the jurisdictional Astt. Commissioner by two separate orders -in -original confirmed the Service Tax demands of Rs. 3,19,644/ - and Rs. 1,58,842/ - against the respondent along with interest and also imposed penalty on them under Sections 77 and 78 of the Finance Act, 1994. On appeals being filed to the Commissioner (Appeals) against these orders, the Commissioner (Appeals) by a common order -in -appeal dated 23 -10 -2008 allowed the appeals holding that vehicles being used by the respondent for operating tours were not tourist vehicles and hence, their activity is not taxable. The Commissioner (Appeals) in this regard relied upon the judgment of the Hon'ble Madras High Court in the case of Secretary Federation of Bus Operators v. Union of India reported in : 2006 (2) S.T.R. 411 (Mad.) : 2001 (134) E.L.T. 618 (Mad.) and also the judgment of this Tribunal based on the judgment of the Hon'ble Madras High Court in the case of C.C.E., Vadodara -II v. Gandhi Travels reported in, 2007 (6) S.T.R. 430 (Tri. -Ahmd.). Against this order of the Commissioner (Appeals), these two appeals have been filed by the Revenue. Heard both the sides.

(2.) SHRI Govind Dixit, ld. Departmental Representative assailed the impugned order by reiterating the grounds of appeal and pleaded that even during the period of dispute, a person operating tours in a contract carriage was covered by the definition of "Tour Operator" and service in relation to operating the tours provided by the Respondent would be taxable.

(3.) WE have considered the submissions from both the sides and perused the records. The Commissioner (Appeals) in para 10 of the impugned order has given a clear finding that the buses being provided by the respondent to their clients were ordinary buses with carrying capacity of 52 passengers and, that the vehicles were neither registered as Tourist vehicles under Section 2(43) of the Motor Vehicles Act nor fulfilled the conditions of Rule 128 of the Central Motor Vehicles Rules. This finding of the Commissioner (Appeals) has not been challenged by the Department. On the contrary, the Department's contention in the grounds of appeal is that both, a' contract carriage conforming to the specifications prescribed in Rule 128 of the Central Motor Vehicle Rules as well as an ordinary contract carriages are covered by the definition of "Tourist Vehicle" as given in Section 65(114) of the Finance Act, 1994 read with Section 2(43) of the Motor Vehicles Act and that Rule 128 of the Central Motor Vehicles [Rules] is relevant only for grant of tourist permit to a vehicle going outside the state and such tourist permit are not required for the operators of contract carriage within the state. Nowhere in the grounds of appeal, the findings of the Commissioner (Appeals) that the buses provided by the respondent did not conform to the specifications for tourist vehicles as given in Rule 128 of the Central Motor Vehicles Rules have been challenged. During the period of dispute, in terms of Section 65(105)(n) of the Finance Act, 1994, the tour operator's service means the service provided or to be provided to any person by a tour operator in relation to a tour. Under Section 65(113), the word 'tour' means, journey from one place to another place irrespective of distance between such places. "Tour Operator" as defined under Section 65(115) covered any person engaged in the business of operating tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 or the rules made thereunder and the word "Tourist Vehicle" has the same meaning as that assigned to it in Section 2(43) of the Motor Vehicles Act, 1988. In terms of the [Section] 2(43) of the Motor Vehicles Act, 1988, "Tourist Vehicle" means a "contract carriage" constructed, adopted, equipped and maintained in accordance with such specifications as may be prescribed in this behalf. The specifications for "Tourist Vehicle" are prescribed in Rule 128 of the Central Motor Vehicles Rules. Thus, during the period of dispute, a person operating tours would be covered by the definition of 'tour operator' under Section 65(115) only if the tour was being operated by him in a tourist vehicle as defined in Section 2(43) of the Motor Vehicles Act. It is in view of these provisions that Hon'ble Madras High Court in the case of Secretary, Federation of Bus Operator (supra) has held that Section 165(105)(n) covers only the tours operated in tourist vehicles which conformed to the specifications prescribed in this regard in Rule 128 of the Central Motor Vehicles Rules. Since during the period of dispute, a person operating tours in a contract carriage, not covered by the definition of 'Tourist Vehicle', was not covered and only the persons operating tours in tourist vehicles were covered by definition of "Tour Operator", the respondent, in this case, who were operating tours in the vehicles, which were not the tourist vehicles in terms of Section 2(43) of the Motor Vehicles Act, read with the Rule 128 of the Central Motor Vehicles Rules, would not be covered by the definition of "Tour Operator". We, therefore, do not find any infirmity in the impugned order. The appeals filed by the Revenue are dismissed.