Custom, Excise & Service Tax Tribunal
M/S Neeraj Construction vs Cce, Jaipur on 16 September, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
R.K. PURAM, W.B. NO.2, PRINCIPAL BENCH
NEW DELHI, COURT NO.I
Service Tax Appeal No. 530 of 2008 with Service Tax Stay No. 1708 of 2008
[Arising out of Order-in-Appeal No. 78 (RKS)ST/JPR-I 2008 dated 09.05.2008 passed by the Commissioner (Appeals-I) Customs & Central Excise Jaipur]
Date of Hearing/ decision: 16.09.2008
For approval and signature:
Hon'ble Mr. Justice S.N. Jha, President
Honble Mr. M. Veeraiyan, Member (Technical)
1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982.
2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3 Whether Their Lordships wish to see the fair copy of the Order?
4 Whether Order is to be circulated to the Departmental authorities?
M/s Neeraj Construction Appellant
Vs.
CCE, Jaipur Respondent
Appearance:
Mr. Atul Gupta, Company Secretary for the Appellant
Mr. L.B. Yadav, Departmental Representative (DR) for the Respondent
CORAM: Mr. Justice S.N. Jha, President
Mr. M. Veeraiyan, Member (Technical)
O R D E R
Per M. Veeraiyan:
We heard both sides for a while on the stay petition. Considering the small amount involved and considering the nature of issue we deem it appropriate to waive pre-deposit and proceed to dispose of the appeal finally.
2. The appellant is a small businessman in Kota and gave on rent one Tata Sumo and one Maruti Esteem to M/s Chambal Fertilisers and Chemicals Limited. The capacity of Maruti Esteem is less than six and the capacity of Tata Sumo is more than six and less than 12 and, therefore, they qualify as motor cab and maxi cab respectively. The original authority held that they are rendering the service of Rent-a-cab Scheme Operator and accordingly confirmed service tax demand of Rs. 1,31,915/- relating to the period from 01.01.2002 to 31.3.2005 and imposed penalties under different sections of the Finance Act 1944.
3. Learned Company Secretary submits that the vehicles used by them cannot be considered as cabs in terms of the provision of Motor Vehicles Act as many of the formalities required under the Motor Vehicle Acts in respect of such cabs have not been complied. They were not used carrying passengers in general unlike the to cabs; they do not have distinguished colour scheme as applicable to cabs. Further, he alternatively submits that the appellant is a small time businessman and he was not aware of the law and he felt that the services rendered by him cannot be considered as Rent-a-cab Scheme Operator.
4. Learned DR submits that only the definition of cab under the Motor Vehicles Act is relevant and compliance to other formalities under Motor Vehicles Act are not pre-requisite for levying service tax. The vehicles used by them deserves to be called as motor cab and maxi-cab and they are renting the same as cab only to the corporate. The charges collected have been rightly taxed as rent-a-cab service.
5.1 We have carefully considered the submissions and perused the relevant provisions of the Finance Act and the Motor Vehicles Act.
Section 65(91) defines Rent-a-cab Scheme Operator as any person engaged in the business of renting of cabs.
5.2 Section 65(20) defines the term cab as follows:-
(1) cab cab means a motor cab or maxi cab [Clause (20) of section 65] (2) motor cab motor cab has the meaning assigned to it in clause (25) of section 2 of the Motor Vehicles Act, 1988 [Clause (71) of section 65] According to clause (25) of section 2 of the Motor Vehicles Act, 1988, motor cab means:
any motor vehicle constructed or adapted to carry not more than six passengers excluding the driver for hire or reward. (3) maxi cab maxi cab has the meaning assigned to it in clause (22) of section 2 of the Motor Vehicles Act, 1988 [Clause (70) of section 65].
According to clause (22) of section 2 of the Motor Vehicles Act, 1988:
any motor vehicle constructed or adapted to carry more than six passengers, but not more than twelve passengers, excluding the driver, for hire or reward.
5.3 By Sections 65(70) to 65 (73) of the Finance Act, the terms maxi cab, motor cab, motor car and motor vehicle have been assigned meaning as defined in the Motor Vehicle Act, 1988. Such linkage by way of adopting the definition cannot be taken to imply that only when all the requirements of Motor Vehicles Act are complied with a vehicle can be considered as a cab. In our opinion, it is for the limited purpose of defining the various varieties of vehicles. We find from the definitions of rent-a-cab operator and cab in the Finance Act, the intention to levy service tax on services using all categories of vehicles for carrying passengers is explicit.
6. In view of the above, we do not find any reason to interfere with the order of the Commissioner (Appeals) in so far as the same relates to the upholding the demand of service tax. However, in the given facts and circumstances of the case taking into account the status of the appellant operating in a small town, we are of the opinion that find the benefit of provisions of Section 80 can be extended as there was reasonable cause for failure of the appellant to follow the service tax law.
7. Therefore, the appeal is disposed of by upholding the demand of service tax and setting aside the penalties imposed on them. Stay petition is also disposed of.
[Dictated and pronounced in the open Court on 16.09.2008] (Justice S.N. Jha) President [M. Veeraiyan] Member [Technical] [Pant]