Rent-a-cab service — Respondent having contract for making available various vehicles on request on hire to army — Held not liable for Service tax as the services similar to rent-a-cab scheme operator services, but not the same.

Rent-a-cab service — Respondent having contract for making available various vehicles on request on hire to army — Held not liable for Service tax as the services similar to rent-a-cab scheme operator services, but not the same.

The respondent had a contract with the Indian Army. The respondent was responsible for making available various means of transport such as buses, taxis, etc. on hire basis. The charges were defined in the contract. The Department levied Service tax considering the same as ‘rent-a-cab scheme operator service’ as the contract was for fairly long period. The CCE (appeals) held that the services of the respondent were not in the nature of rent-a-cab and therefore, set aside the demand of the Department. Against the Departmental appeal, the respondent argued that the vehicles were not given at disposal of the Indian Army and the services were similar to taxi services. The only difference was that the contract was for a longer period which is the prerequisite of rendering such services prescribed by the Indian Army. Moreover, the turnover in certain years was less than the basic threshold limit prescribed in Notification No. 6/2005, dated 1-3-2005.

Held:

The facts of the case were similar to that of taxi operator in the street. Such services were not liable to Service tax. Only the rates were for a fairly long duration, but the vehicles were not put at disposal of the army for a long duration. The appeal of the Department was dismissed.