2007 (8) TMI 58 - AT - Service Tax

Demand(Service tax) - Revenue contended that appellant liable for service tax under Business Auxiliary Service but the appellant activity covered under Travel Agent service - Held that tax can t collected without issuance of proper SCN

Summary

Issues:
Taxability of services provided by appellants under "Business Auxiliary Services" category prior to 10-9-2004 and "Travel Agent Services" category post 10-9-2004.

Analysis:
The appeal was filed against an Order-in-Appeal passed by the Commissioner of Customs, Central Excise and Service Tax (Appeals), Cochin. The appellants, acting as agents for booking bus tickets, argued that their services should be classified under "Travel Agent Services," taxable from 10-9-2004, rather than "Business Auxiliary Services." The period of dispute was from 1-7-2003 to 31-3-2005, with a show cause notice issued on 25-11-2005. The appellants contended that they should be exempt under Notification No. 14/2004-ST dated 10-9-2004 if considered under "Business Auxiliary Services."

The learned Counsel for the appellants emphasized that the services provided clearly fell under the "Travel Agent Services" category introduced from 10-9-2004. On the other hand, the SDR reiterated the impugned Order-in-Appeal without providing any new arguments. After hearing both sides, the Tribunal noted that the appellants were indeed providing services as travel agents, a category taxable only from 10-9-2004. As the Revenue had not issued a proper show cause notice under this category, the demand for Service Tax under "Business Auxiliary Services" was deemed unsustainable.

Consequently, the Tribunal found the impugned order to be without merit and set it aside, allowing the appeal with consequential relief. The Tribunal also clarified that the Revenue could initiate tax recovery action under the correct category of "Travel Agent Services" from 10-9-2004 onwards, provided all legal procedures were followed. The judgment was pronounced and dictated openly in court, providing a clear resolution to the taxability issue raised in the appeal.