Transportation services provided via 'contract carriage' vehicles for the purpose of carrying employees or school children, excluding tourism, conducted tours, or charters, are exempt from service tax under the Mega Exemption Notification No. 25/2012.

DR. RACHNA GUPTA:

The present appeal is filed to assail the Order-in-Appeal bearing no.90/2020-21 dated 14.08.2020 vide which the service tax demand confirmed by the Original Adjudicating Authority has been upheld. However, the penalty of Section 76 of the Finance Act, 1994, has been reduced to Rs.2,06,393/-. Still being aggrieved the appellant is before this Tribunal.

2. The facts in brief relevant for the present adjudication are as follows:

The appellant is engaged in manufacture of writing and printing papers. Appellants have also rented buses vide agreements with various persons, who were engaged in providing bus services for the factory employees and school going children on various routes as per the terms and conditions of those agreements which were executed during the period from December, 2015 to June, 2017.

3. Department observed that the appellant was liable to pay service tax under Reverse Charge Mechanism in respect of Services of “Renting of any motor vehicle designed to carry passengers”. Despite that the benefit of Serial No.9 of the Notification No.26/2012 dated 20.06.2012, was available to the appellant was observed to not to have paid the service tax amounting to Rs.20,63,928/-. The same was proposed to be recovered along with interest at appropriate rate and the penalties under section 76 of the Finance Act, 1994. The proposal was initially confirmed vide Order-in-Original No.08/2018-19 dated 30.08.2018, the appeal against the said order has been disposed of vide the impugned order in appeal.

4. We have heard Shri K.Vaish, learned counsel for the appellant and Shri Rajeev Kapoor, learned Authorised Representative appearing for the department.

5. Learned counsel for the appellant has submitted that the issue involved had already been decided by the Division Bench of this Tribunal in appellant‟s own case vide Final Order No.51070 of 2025 dated 25.07.2025. The present appeal is prayed to be disposed of in the similar manner in favour of the appellant.

6. Learned Departmental Representative has acknowledged the aforesaid decision, however has reiterated the findings arrived at by Commissioner (Appeals) and the disposal of the present appeal accordingly.

7. We have heard both the parties and have perused the appeal records as well as the aforementioned Final Order dated 25.07.2025, wherein like in the present case, the applicability of Reverse Charge Mechanism Notification No.30/2012 dated 20.06.2012 was objected. It is held in the said decision as follows:

Foremost we have perused the said notification. It recites as follows:

“In exercise of the said powers conferred by the Section 68(2) of the Finance Act, 1994 (as amended), the Notification No. 30/2012-ST dated 20.06.2012 (as amended from time to time) has been issued by the Central Government which has become effective w.e.f. 01.07.2012. Vide said notification, interalia, following service has been notified in respect of which a recipient of Service has to pay the applicable Service Tax.

“The taxable services provided or agreed to be provided by way of renting of a motor vehicle designed to carry passengers to any person who is not in the similar line of business by any individual, Hindu Undivided Family or partnership firm, whether registered or not, including association of persons, located in the taxable territory to a business entity registered as body corporate, located in the taxable territory.”

8.2 The perusal makes it clear that this notification provides a mechanism for payment of service tax by the service recipient under reverse charge mechanism in case of the services of r