2011 (6) TMI 593 - AT - Service Tax

Waiver of pre-deposit - Tour Operator , Air Travel Agent and Travel Agents services - appellant submitted that the services provided in the out-bound tours were performed outside India. Therefore they are not liable to Service tax under the provisions of Finance Act, 1994 - services provided by the appellant prima facie is covered by the Circular No. 111/05/2009-S.T., dated 24-2-2009 issued by the Board. waiver of pre-deposit granted. Treating the amount already paid by the appellant is sufficient

Summary

Issues:
1. Taxability of out-bound tour operator services under 'tour operator' services.
2. Applicability of service tax under the Finance Act, 1994.
3. Claim for abatement under Notification No. 12/2004.
4. Interpretation of Circulars issued by the department.
5. Consideration of services provided outside India as export of service.

Analysis:

1. The appellant, engaged in providing out-bound tour operator services, argued that the services performed in out-bound tours were outside India, thus not liable to service tax under the Finance Act, 1994. The appellant relied on Circulars, Supreme Court decisions, and OECD guidelines to support their claim that the tours qualified as export of service under the Export of Service Rules, 2005.

2. The Jt. CDR contended that as per the definition of 'tour operators' service, the appellant, by planning, scheduling, and organizing tours within India, fulfilled the criteria of being a 'tour operator.' Therefore, the services provided by the appellant were deemed to be rendered in India, making them subject to service tax under the Finance Act, 1994.

3. The Tribunal considered the submissions from both sides regarding the definition of 'tour operator,' amendments to the definition, OECD Guidelines, and the Export of Service Rules. However, the Tribunal found that a Circular issued by the Central Board of Excise & Customs (CBEC) clarified the issue of taxability of tour operator services in connection with Haj & Umrah pilgrimage, stating that services performed outside India are not subject to service tax. The Tribunal opined that the services provided by the appellant were prima facie covered by the Circular, warranting a waiver of pre-deposit and granting a stay against recovery during the appeal.

4. Given that the services were performed partly in India and partly outside India, the Tribunal concluded that the Circular's provisions applied to the appellant's case. The Tribunal acknowledged the appellant's prima facie case based on the Circular and waived the pre-deposit requirement, considering the amount already paid by the appellant as sufficient. Consequently, the Tribunal granted a stay against recovery pending the appeal process.

In conclusion, the Tribunal's judgment favored the appellant based on the interpretation of the Circular, which exempted services performed outside India from service tax liability, leading to the waiver of pre-deposit and the grant of a stay against recovery during the appeal.