Akshar Travels Vs C.C.E. & S.T.-Daman (CESTAT Ahmedabad)
In the case of Akshar Travels v. C.C.E. & S.T.-Daman [Service Tax Appeal No. 263 of 2012-DB, dated August 17, 2023], the CESTAT Ahmedabad ruled that the usage of motor vehicles for transporting school children significantly differs from the concept of rent-a-cab service. Therefore, no service tax is applicable to transportation services for children commuting to and from school.
Facts:
Akshar Travels (“the Appellant”) was engaged in the business of transportation of passenger, more specifically providing buses for transporting school children. The Appellant was providing transportation services to the school which is owned and managed by M/s. J.K Paper Limited (“the service recipient”) for which the Appellant was charging rent on a monthly basis from the service recipient.
The Revenue Department (“the Respondent”) contended that since, the service recipient is a commercial organization and the Appellant was providing rent-a-cab service accordingly the amount received from the service recipient was liable for service tax under the category of rent- a-cab service.
The Adjudicating Authority vide an order (“the Impugned Order”) confirmed the demand under the category of rent-a- cab service.
Aggrieved by the Impugned Order the Appellant filed an appeal before the CESTAT, Ahmedabad.
The Appellant submitted that transportation services were used by an educational body which was excluded from the definition of “cab” as provided under Section 65 (20) of the Finance Act, 1994 (“the Finance Act”). Therefore, service tax is not leviable.
The Appellant relied upon the Judgement of M/s. Maharashtra State Road Transport Corporation v. Commissioner of Central Excise [2016 (42) STR 32 (Tri. Mumbai)] wherein the CESTAT, Mumbai held that, tour operator service and Rent-a-Cab service are exempted if the journey is organized or arranged for an educational body.
Issue:
Whether motor vehicles rented for use by an educational body will be liable for service tax?
Held:
The CESTAT, Ahmedabad in Service Tax Appeal No. 263 of 2012-DB ruled as under:
