Ram Pratap Jat Vs CCE & ST, Jaipur- I (CESTAT Delhi)
Daily or Monthly Bus Supply Cannot Be Classified as Rent-a-Cab Service; Service Tax Demand on Bus Hire Set Aside Because Activity Was Transportation Service; CESTAT Deletes Service Tax Demand Because RSRTC Bus Contract Was Not Rent-a-Cab Arrangement; No Service Tax on Bus Hiring Where Effective Control Remains with Operator; Extended Limitation Invalid Due to Bona Fide Belief on Taxability of Bus Hiring; Penalties Under Sections 76, 77 and 78 Unsustainable After Service Tax Demand Fails.
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Delhi allowed the appeal filed by Ram Pratap Jat against Order-in-Appeal dated 13.06.2016, holding that transport services provided to Rajasthan State Road Transport Corporation (RSRTC) could not be classified as “Rent-a-Cab Service” where buses were supplied along with drivers and operational control remained with the owner.
The appellant had provided two buses with drivers to RSRTC during the period April 2007 to September 2009. The department alleged that the activity constituted taxable “Rent-a-Cab Service” and observed that the appellant had neither obtained service tax registration nor filed ST-3 returns. Based on receipts of Rs.26,45,703 after abatement on gross receipts of Rs.66,14,256, a show cause notice dated 18.06.2012 was issued invoking the extended period of limitation and demanding service tax of Rs.3,22,431 along with interest and penalties under Sections 76, 77, and 78 of the Finance Act, 1994.
