Service Tax - Transportation of answer sheets collected from District collection centres and delivering the same to Nagpur University - since appellant is being paid on KM basis he cannot be called as a Rent-a-cab scheme operator
THE appellant is owner of motor vehicles. Under a work order placed by the Nagpur University, the appellant undertook the job of transporting answer sheets from various district collection centres and delivering the same to the University.
Revenue held the view that such a service is covered under "Rent-a-Cab scheme operator" and the appellant is required to discharge Service Tax.
Demand notices were issued, also invoking extended period, and confirmed by the adjudicating authority. The Commissioner (Appeals) upheld the demand of service tax and restricted the penalty amount to 25% of the service tax imposed u/s 78 and also reduced the penalty imposed u/s 77 of the FA, 1994 to Rs.1,000/-.
Appellant is before the CESTAT against the confirmation of the ST demand and the Revenue is not happy with the reduction in penalty.
The appellant submitted that they had provided vehicles to the Nagpur University for transportation of written answer sheets. As per the work order placed by the University, the appellant was to receive an amount of Rs.4.70 per K.M. As per the terms and conditions of the contract, the appellant has to collect the written answer sheets from six District Collection Centres and deliver those to Nagpur University. Inasmuch as since the payment was to be made by the University on Kilometre basis for the week/month, it could not be said that the appellant had provided "Rent a Cab scheme operator" services.
The Bench observed -
"7. In the present case, the appellant was engaged in the activity of transportation of written answer sheets collected from various District Collection centres and deliver the same to the Nagpur University and the payment is on the Kilometre basis as per the work order. There is no evidence on record to show that the cab was hired on monthly, weekly or daily basis. In view of the terms and conditions of the work order, we find merit in the contention of the appellant, that the appellant has not provided taxable service of "Rent-a-Cab Operator" services. In view of this, the demand and consequential penalty is set aside. As the demand is set aside, therefore, there is no question of imposition of any penalty. Hence the appeal filed by the Revenue is dismissed ."