The Chandigarh bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the service tax demand under the category of rent-a-can service on the ground of non-inclusion of serious under ‘Business Auxiliary Services’ (BAS).
Shemco India Transport, the appellant assessee was providing services under Cargo handling Services, Business Auxiliary Services, Manpower Recruitment and Supply Agency Services, Erection Commissioning and Installation Services to Nestle India Ltd, Moga, and the assessee had provided services concerning material handling, loading, unloading, providing trailers, low bed trollies, tractor trollies, tractor cranes, erection commissioning and installation of plant and machinery with requisite manpower to Nestle.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand of service tax under Rent-a-cab service of Rs. 3,09,800/- interest and equal penalty under Section 78 & Rs.1000/- under Section 77 of the Finance Act,1994.
Alok Arora, the counsel for the assessee contended that the show cause notice was issued on demanding service tax under Rent-a-cab service, manpower Recruitment, or Supply Agency service, and the said show cause notice was also issued by invoking the extended period of limitation.
Also submitted that the tractor crane with driver runs within the factory of Nestle does not fall under the category of ‘Business Auxiliary Service’ rather it falls undersupply of tangible goods service which was made taxable with effect from 16.05.2008.
Shivam Syal, the counsel for the department relied on the decisions made by the lower authorities and contended that the assessee’s services fall under the category of ‘BAS’ and the demand was as per the law and liable to be sustained.
The Bench observed that in the case of Rahul Travels, the court held that when the cars and Buses are given in hiring as contract carriage on a payment basis on their usage as per kilometer basis though possession with repair and maintenance remained with the owner, the same was not taxable before 01.01.2007 either under Rent-a-Cab service or under Tour Operator service.
The two-member bench comprising S S Garg (Judicial) and Anjani Kumar (Technical) quashed the service tax demand imposed against the assessee while allowing the appeal filed by the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
