Exemption available to Tour operator not admissible if assessee does not has tourist bus.

PJ/Case law/2014-15/2218

Case:- STATUS CAR RENTALS Vs COMMISSIONER OF CENTRAL EXCISE, NASHIK

Citation:- 2013-TIOL-1556-CESTAT-MUM

Brief facts:-The appellant filed this appeal against the impugned order whereby a demand of Rs. 4,49,021/- is confirmed along with interest and penalties are imposed on the ground that the appellants are providing rent-a-cab operator service and wrongly availing the benefit of Notification NO. 39/97-ST dated 22.8.1997.

Appellant’s contentions:-The contention of the appellants is that the appellants are engaged in the business of rent a- cab and in the year 1997, the appellants were registered with the Revenue as provider of tour operator service. The contention is that prior to 2000, as per the definition of rent-a-cab service, the provider should have 50 cabs. As the appellants are not having 50 cabs, therefore the appellants are not covered under the rent-a-cab service nor under the tour operator service as the appellants are not having any tourist bus. In spite of this, the appellants had paid service tax by availing the benefit of Notification 39/97-ST as tour operator. With effect from financial year 2000, the definition of rent-a-cab has been amended whereby the restriction of 50 cabs was removed. However, the appellants continued to pay service tax under the category of ‘tour operator' by availing the benefit of the Notification.

The appellants submitted that the whole demand is time barred as the show cause notice was issued in the year 2006 demanding service tax for the period 2000-04 invoking extended period of limitation on the ground of suppression. As the appellants were regularly filing ST-3 returns, therefore the allegation of suppression is not sustainable hence the demand is time barred.

Respondent’s contentions:- The Revenue relied upon the findings of the lower authority and submitted that as the appellants are not having a tourist bus, therefore the appellants are not covered under the scope of tour operator but the appellants were wrongly paying service tax under the category of tour operator by availing the benefit of the Notification, though the appellants are providing rent-a-cab service.

Reasoning of judgment:- Hon’ble tribunal find that the appellants are not having any tourist bus. The appellants are giving only cabs. Therefore, they find that the appellants are not covered under the scope of tour operator service. In view of this, the appellants are not entitled for the benefit of Notification 39/97-ST which covers only tour operator service. As the appellants are providing rent-a-cab service, therefore they find no infirmity in the impugned order whereby the demand is confirmed. In respect of penalty, they find that as the appellants are registered as a provider of tour operator and paying tax accordingly and also filing statutory returns, therefore as per the provisions of Section 80 of the Finance Act, they find that it is not a case for imposition of any penalties. The penalties imposed under the impugned order are set aside. The appeal is disposed of in above terms.

Decision:- Appeal disposed off.

Comment:- The analogy of the case is that appellants are not having any tourist bus hence not covered under tour operator service. Consequently benefit of notification 39/97-ST not available. However, as the service tax was paid under Tour Operator Service, it was observed that it was a fit case to invoke the provisions of section 80 and waive penalty.

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PJ/Case law/2014-15/2218

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