2009 (1) TMI 756 - AT - Service Tax

Summary

Issues:
1. Whether the appellant is considered a tour operator under Section 65(115) of the Finance Act, 1994.
2. Applicability of Notification No. 15/2007-S.T. for service tax calculation.
3. Time-barred demand for service tax.
4. Financial hardship plea by the appellant.

Analysis:

1. The main issue in this case was whether the appellant, who claimed to be plying buses on different routes, should be classified as a tour operator under Section 65(115) of the Finance Act, 1994. The Commissioner had confirmed a demand for service tax along with interest and penalties. The appellant contested this classification, arguing that even if considered tour operators, they should only pay service tax on 40% of the value as per Notification No. 15/2007-S.T.

2. The appellant relied on Notification No. 15/2007-S.T. to support their claim that they should only pay service tax on 40% of the value. The Tribunal noted that the Commissioner had allowed the benefit of this notification but emphasized that the practice of non-levy acknowledged in the notification only related to collecting duty at 40% of the value, not a complete non-levy practice. The Tribunal found that the appellant had not registered with the Central Excise authorities or filed required returns, potentially justifying the extended time for demanding duty on 40% of the gross amount.

3. The appellant also argued that the demand for service tax for certain periods was time-barred, citing a Tribunal decision and financial hardship due to loan repayments for bus purchases. However, the Tribunal noted that while the appellant mentioned financial hardship, no evidence was provided to support this claim. The Tribunal directed the appellant to deposit a specified amount within a set timeframe, waiving the pre-deposit of the balance amount of tax and penalties pending appeal disposal.

4. In conclusion, the Tribunal's judgment addressed the classification of the appellant as a tour operator, the application of Notification No. 15/2007-S.T. for service tax calculation, the time-barred demand for service tax, and the appellant's plea of financial hardship. The Tribunal provided a directive for deposit and waived pre-deposit subject to compliance, setting a date for the appeal to be reported on.