Custom, Excise & Service Tax Tribunal
(Ii) Ccce&St, Hyderabad vs (Ii) Andhra Pradesh State Road ... on 24 October, 2017
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL REGIONAL BENCH AT HYDERABAD Bench Division Bench Court I APPEALs No. ST/30314/2017 and ST/30347/2017; ST/30616/2017 (Arising out of Orders-in-Original No. HYD-SVTAX-000-COM-141-16-17, dated 05.12.2016 and HYD-SVTAX-000-COM-146-16-17, dated 16.12.2016 passed by Commissioner of Service Tax, Hyderabad) (i) Andhra Pradesh State Road TransportCorporation, Hyderabad. (ii) CCCE&ST, Hyderabad. ..Appellant(s) Vs. (i) CCCE&ST, Hyderabad (ii) Andhra Pradesh State Road Transport Corporation, Hyderabad. ..Respondent(s)
Appearance ShriG. Natarajan, Advocate for the Appellant.
ShriAmar Prakash, Asst. Commissioner & Sh. B. Raja Ambedkar, Superintendent/ARs for the Respondent.
Coram:
Honble Shri M.V. Ravindran, Member (Judicial) Honble ShriMadhu Mohan Damodhar, Member (Technical) Date of Hearing :08/09/2017 Date of Decision :.
FINAL ORDER No._______________ [Order per: Madhu Mohan Damodhar] All these three appeals raises a common question of law and being directed against the same order impugned are disposed of by a common order; Appeal No.ST/30616/2017-ST-DB is not listed; it was mentioned as the same arising of the same Order-in-Original, be taken up today for disposal; accordingly, we called for appeal papers and after ascertaining the facts that Revenues appeal is against the same Order-in-Original, we take up the same for disposal today. Revenues appeal is against abatement granted by adjudicating authority.
2. In these appeals, demand of differential tax has been made against the appellants under Tour Operator Services. Appellants were engaged in providing variouschartered/contract carriage/tour services apart from operating stage carriage busses. It emerged that appellants had entered into contract with M/s E.C.I.L for hiring busses from various depots of appellants on hire charges. It also emerged that appellants have provided busses on hire to other State/Central Public Sector units and private entities for transporting their employees from their work place to specific destinations and vice versa on payment of hire charges. Appellants also operated tours by providing busses to marriage parties, pilgrimages etc. It appeared to the department that these services provided by appellant fall within the ambit of Tour Operator service as defined under section 65(115) of Finance Act, 1994 attracting service tax liability. Show cause notice dated 23.07.2012 was issued to appellants, inter-alia proposing demand of differential tax liability on tour operator services provided by them during the period April 2009 to March 2012 alongwith interest liability thereon as also imposition of penalty under various provisions of Law. After due process of adjudication, the adjudicating authority vide impugned order No. HYD-EXCUS-001-COM-028-16-17, dated 30.06.2016 dropped all proceedings contemplated in the said show cause notice dated 23.07.2012. Department took the view that these services provided by appellant fall in the category of Tour Operator Services as defined in Section 65(115) of Finance Act, 1994 attracting service tax liability. Accordingly, show cause notice dated 10.09.2014 was issued to appellants, interalia proposing demand of differential tax liability of Rs.3,58,74,984/- with interest thereon as also imposition of penalties under various provisions of law. After due process of law, the lower authorities vide impugned order dated 05.12.2016 confirmed the proposed tax liability with interest and also imposed penalty of Rs. 3,58,74,984/- under section 76 of the Finance Act, 1994 and Rs. 10,000/- under section 77 of Finance Act, 1994. Hence appeal No. ST/30314/2017.
3. In appeal No. ST/30347/2017 on the same grounds for the period April 2012 to March, 2013, show cause notice dated 27.04.2015 was issued to appellants, interalia proposing demand of differential tax liability on tour operator services carried out by appellant, amounting to Rs.2,79,56,962/- for the period April 2012 to March 2013 and Rs.9,08,88,105/- for the period April 2013 to March 2014. On adjudication, lower authorities vide impugned order No. HYD-SVTAX-000-COM-146-16-17, dated 16.12.2016 confirmed the demand of Rs. 1,11,82,785/- for the year 2012-13 and Rs. 3,63,55,242/- for the services provided during the year 2013-14, alongwith interest liability thereon. Penalty of Rs.4,75,38,027/- was also imposed under section 78 of the Act alongwith penalty of Rs. 10,000/- under section 77 ibid. Hence, appeal No. ST/30347/2017.
4. In appeal No.ST/30616/2017, Revenue is aggrieved by the HYD-SVTAX-000-COM-146-16-17, dated 16.12.2016, wherein the adjudicating authority has extended benefit of abatement from the taxable value. Since this issue is interconnected with the appeals of assessee, this appeal is also taken up for disposal.
5. On 08.09.2017, when the matter came up for hearing, on behalf of the appellants, Ld. Counsel Shri G. Natarajan made the following submissions:
(a) From 01.07.2012, a negative list based service tax levy was imposed and the term service has been defined in Section 65 B (44) of the Act and all services, other than those mentioned in the negative list or exempted from payment of service tax are liable to levy of service tax.
(b) Section 66 D of the Act, containing the negative list covers the following, during the relevant period.
Service of transportation of passengers, with or without accompanied belongings by-
(i) A stage carriage;
(ii) Railways in a class other than-
(A) First class; or (B) An air-conditioned coach;
(iii) Metro, monorail or tramway;
(iv) Inland waterways;
(v) Public transport, other than predominantly for tourism purpose, in a vessel between places located in India and
(vi) Metered cabs, radio taxis or auto rickshaws.
(c) Further, the following exemption has been provided for under notification 25/2012 ST dated 20.06.2012.
Transport of passengers, with or without accompanies belongings by-
(i) Air, embarking from or terminating in an airport located in the State of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim or Tripura or at Bagdogra located in West Bengal.
(ii) A contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire; or
(iii) Ropeway, cable car or aerial tramway.
6. Ld. DRs Shri Amar Prakash and Sh. B. Raja Ambedkarsubmits that from 1.7.2012, the negative list regimen is vogue, hence the submissions of learned counsel are to be rejected.
7. We find that for the period from 01.07.2012, all services unless specifically mentioned in the negative list or otherwise, specifically exempted are liable to discharge service tax.
8. Ld. Advocate for the appellants was at pains to covey that as per Section 66 (D) (o), containing the negative list, also covers service of transportation of passengers, with or without accompanied belongings by, inter-alia, (i) stage carriage. Ld. Advocate has also placed reliance on notification No. 25/2012-ST, dt. 20.06.2012 (reproduced in para 3 (e) (supra), exempting tax liability in respect of transport of passengers, with or without accompanied belongings by contract carriage for the transportation of passengers, excluding tourism, conducted tour, charter or hire.
9. We have no dispute on the factum of above provisions which would be appropriate to refer to the relevant provisions of Motor Vehicles Act, 1988, to understand the issue better. Section 72 of Motor Vehicles Act, 1988 covers the grant of stage carriage permits. Sections 73 & 74 govern the procedure for obtaining a contract carriage permit, section 88 (8) provisions for grant of special permit to any public service vehicle including a stage carriage vehicle for carrying passenger or passengers for hire or reward under a contract, express or implied, for the use of the vehicle as a whole, without stopping to pick up or set down along the line of route passengers not included in the contract.
10. Discernibly, for a vehicle having stage carriage permit like busses owned by the appellants, to operate for private persons/marriage parties under a contract, such basis will then necessarily be required to obtain a contract carriage permit or a special permit as aforesaid. In our view, once such a contract carriage permit or a special permit is obtained, the bus will then no longer has the character of a stage carriage but will instead acquire the colour of a contract carriage/special permit garage. Viewed in this light, the busses of the appellants having become contract carriage or a special permit garage even if for temporary permit to provide them on hire for marriages/pilgrimage etc. this cannot be considered as a stage carriage for that short period and hence cannot then claim to be recovered under the negative list of services by a stage carriage or for that matter covered by the exemptions, provided under section No. 23 of notification 25/2012 since that exemption will not cover contract carriage on hire. In the event, the demand of service tax in all these appeals for the period from 01.07.2012 onwards is stated by law and the impugned orders are sustained to that extent along with demand of interest liability thereon. In consequence, the appeals will also not succeed to the extent of tax liability demanded from 1.7.2012 onwards. However, considering that the matter is one of the unproductive and that the question of taxability on the services was mired in confusion and litigation, the penalties imposed in all these cases are set aside.
11. As regards appeal filed by the Revenue, in view of the above findings in the appeals of APSRTC, the same findings are to be applied and the appeal of Revenue stands disposed of.
(Pronounced in the open court on...................)
(MADHU MOHAN DAMODHAR) (M.V. RAVINDRAN)
MEMBER (TECHNICAL) MEMBER (JUDICIAL)
VRG
Application No. ST/30314/2017
ST/30347/2017
(1)