Green Logistics Corporation Vs C.C.E. & S.T.-Vadodara-i (CESTAT Ahmedabad)
Introduction: In a recent judgment by CESTAT Ahmedabad, the case between Green Logistics Corporation and C.C.E. & S.T.-Vadodara-i was resolved. At the core of the dispute was whether Green Logistics should be liable to pay Service Tax for hiring buses to the Maharashtra State Road Transport Corporation (MSRTC) under the label of ‘Rent a Cab operator Service’.
Analysis: The appellant argued that they had regularly paid service tax under various heads and believed that the act of hiring vehicles differed from the ‘rent a cab service’, thereby not qualifying for service tax. Various past judgments were cited to emphasize that the hiring of buses should not be subjected to the same taxable service as rent-a-cab services. Furthermore, it was argued that the entire demand for the period May 2008 to March 2010 was time-barred due to the late issuance of the show cause notice. Penalties under Sections 76, 77 & 78 of the Finance Act 1994 were also contested.
On the other side, the revenue reiterated the findings of the original order without adding much to the discourse.
In the light of previous judgments, it was observed that even if a demand was sustainable on merit, if it was beyond the Normal period, it couldn’t be upheld.
Conclusion: After considering the submissions of both parties, CESTAT Ahmedabad ruled in favor of Green Logistics Corporation. The judgment clarified that the entire demand made beyond the standard period was unsustainable. As a result, the service tax demand on hiring buses to MSRTC under the ‘Rent a Cab Operator Service’ was quashed, and the penalties were also deemed unsustainable. The appeal was thereby allowed, setting aside the impugned order.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
1. The issue involved in the present case is that, whether the appellant is liable to pay Service Tax on the hiring of Buses to Maharashtra State Road Transport Corporation (MSRTC) under the head of ‘Rent a Cab operator Service’.
2. Shri, Mrugesh Pandya, Learned Counsel appearing on behalf of the appellant submits that the appellant were paying service tax under ‘rent a cab service’ and ‘Tour operator service’ regularly. They were under bonafide belief that, since hiring the vehicle is different from rent a cab service the same is not liable for service tax.
2.1 He submits that at the most the hiring of the vehicle to Maharashtra State Road Transport Corporation (MSRTC) is falling under ‘Supply of Tangible Goods Service’. However, since the demand was not made under that head service tax demand is not sustainable.
2.2 He further submits that the issue involved in the present case was not free from doubt that whether the hiring of buses should fall under the taxable service of rent a cab service, only after various judgments it was held with the said service is liable to tax, in such a situation the appellant’s bonafide belief cannot be doubted. Hence the demand for extended period cannot be invoked; he placed reliance on the following judgments:
