2012 (4) TMI 615 - AT - Service Tax

Summary

Issues Involved:
1. Classification of services under "tour operator's service."
2. Jurisdiction of the Commissioner to review the adjudication order.
3. Applicability of exemption under Notification No. 20/2009-S.T.

Summary:

1. Classification of Services:
The appellant, M/s. Moharir Travels, Nashik, provided transportation services for companies and schools. A show cause notice dated 17-7-2007 classified these services under "tour operator's service" u/s 65(115) of the Finance Act, 1994, demanding Service Tax of Rs. 2,15,895/- for the period from 10-9-2004 to 31-3-2007 u/s 73(1), along with interest u/s 75 and penalties u/s 76, 77 & 78. The Assistant Commissioner dropped the proceedings, but the Commissioner reviewed and upheld the demand, citing the amended definition effective from 10-9-2004. The appellant argued that their services did not involve planning or organizing tours and did not use vehicles with a tourist permit, thus not falling under the "tour operator's service."

2. Jurisdiction of the Commissioner:
The appellant contended that the Commissioner had no jurisdiction to review the adjudication order post-19-8-2009 as per the amended Section 84 of the Finance Act, 1994. However, the Tribunal clarified that the explanation to the substituted Section 84 allowed the Commissioner to review orders passed before the amendment, thus validating the review.

3. Applicability of Exemption:
The appellant claimed exemption under Notification No. 20/2009-S.T., dated 7-7-2009, which was given retrospective effect. However, the Tribunal noted that the appellant's permit was not for inter-state or intra-state transportation, thus not qualifying for the exemption.

Majority Decision:
The Tribunal directed the appellant to pre-deposit Rs. 2,15,895/- within four weeks, failing which the stay on recovery would lapse. The majority decision emphasized that the amended definition of "tour operator" post-10-9-2004 was broader, covering any mode of transport, and the appellant's services fell within this scope.

Dissenting Opinion:
Member (Judicial) disagreed, arguing the show cause notice was issued without jurisdiction and cited contradictory views on the issue by various authorities, suggesting a complete waiver of pre-deposit.

Final Order:
In view of the majority decision, the appellant was directed to make the pre-deposit and report compliance, with the balance of dues waived and recovery stayed during the appeal's pendency.