2010 (9) TMI 327 - AT - Service Tax

Waiver of pre-deposit - excess baggage carried by the passengers by aircraft - Baggage carried by passengers by air craft beyond certain permissible limit - goods are carried in air by an aircraft by what ever means that may be, that does not make any difference to law - Section 65(105)(zzn) that clearly throws light that taxable service provided to any person, by air craft operator, in relation to transport of goods by aircraft is covered by the scope of the law waiver of pre-deposit not allowed

Summary

Issues Involved:
Interpretation of taxable service under Section 65(105)(zzn) of the Finance Act, 1994 regarding excess baggage charges carried by passengers by aircraft.

Analysis:
The appellant argued that excess baggage carried by passengers by aircraft does not fall under taxable service provided by the aircraft operator for the transport of goods under Section 65(105)(zzn) of the Finance Act, 1994. They contended that the transport of goods service was not rendered by them, and the excess baggage charges were not for any service provided. The essential service of the aircraft is carrying passengers, and therefore, the taxation imposed was deemed improper.

The respondent, on the other hand, supported the orders of the authorities below, maintaining that the excess baggage charges should be considered taxable under the relevant provisions.

Upon hearing both sides and examining the statutory provisions, the Tribunal noted that the definition of taxable service under Section 65(105)(zzn) includes any service provided by an aircraft operator in relation to the transport of goods by aircraft. The term "aircraft" as defined in Section 65(3a) of the Finance Act, 1994 includes passenger aircraft, and the definition of "goods" is derived from the Sale of Goods Act, 1930. The Tribunal emphasized that once tangible goods are carried by an aircraft for consideration, it falls within the scope of the law, irrespective of the means of transport. Therefore, the Tribunal directed the appellants to make a pre-deposit of Rs. 30 lakhs within a specified timeline, with the balance demand stayed pending the appeal.

The Tribunal also allowed both parties to present detailed arguments on merit during the regular hearing, keeping the case open for further elaboration and discussion.