2013 (9) TMI 323 - AT - Service Tax

Waiver of pre-deposit - Tour operator service - Held that - applicants are engaged in the business of planning, scheduling, organizing or arranging tours for the Ranthambore National Park - benefit of notification No.1/2006 now claimed by the applicant was not clamed before the lower authority. Therefore, contention of the applicant regarding eligibility of notification has not gone by the adjudicating authority - stay granted partly.

Issues:
1. Whether the applicant qualifies as a tour operator for service tax purposes.
2. Applicability of section 80 of Finance Act, 1994.
3. Benefit of Notification No.1/06 regarding abatement.
4. Claim of benefit of notification before lower authorities.
5. Amount to be deposited for waiver of remaining tax, interest, and penalties.

Issue 1: Qualification as a Tour Operator
The applicant contended that they do not fall under the definition of a tour operator as per the Motor Vehicle Act, arguing that they are only involved in organizing the entry of tourists into a park to maintain environmental conditions. They claimed to be under the jurisdiction of the Department of Forest, Government of Rajasthan, and not engaged in planning or arranging tours. However, the Revenue asserted that the applicant's activities, charging fees for vehicle entry into the park, align with the definition of a tour operator under the Finance Act, 1994. The Tribunal found that the applicant's actions of arranging tours for the Ranthambore National Park, charging specific amounts per person for different vehicles, indeed fell within the scope of a tour operator. The Tribunal rejected the applicant's argument that they were not providing tour operator services, emphasizing the nature of their activities as falling under the definition provided by the Act.

Issue 2: Applicability of Section 80 of Finance Act, 1994
The applicant argued that they were under a genuine belief that they were not liable to pay service tax, and thus, the demand for service tax was not sustainable. They highlighted that the adjudicating authority had granted them the benefit of section 80 for one show cause notice due to this belief. However, in a subsequent notice, this benefit was not extended, and penalties were imposed under sections 76 and 77. The Tribunal acknowledged the applicant's argument but noted that the demand post-1.10.2008 amounted to approximately Rs.43 lakhs. While the benefit of Notification No.1/06 was not claimed before the lower authorities, the Tribunal directed the applicant to deposit Rs.25 lakhs within eight weeks to waive the remaining tax, interest, and penalties, considering the issue of time bar.

Issue 3: Benefit of Notification No.1/06
The Revenue contended that the applicant did not claim the benefit of Notification No.1/06 before the lower authorities, leading to the demand being rightfully made. The Tribunal observed that the lower authority did not address the eligibility of the notification due to the stay stage of the proceedings. The Tribunal indicated that the aspect of the benefit of the notification would be considered during regular hearings, emphasizing the need for compliance with the deposit requirement to proceed further in the case.

Issue 4: Claim of Benefit of Notification Before Lower Authorities
The applicant's claim regarding the benefit of Notification No.1/06 was not raised before the lower authorities, leading to the demand being upheld. The Tribunal highlighted the importance of raising all relevant claims and arguments before the appropriate authorities to ensure a comprehensive consideration of the case. The failure to claim the benefit of the notification at the initial stages impacted the outcome of the proceedings, underscoring the significance of presenting all relevant details during the legal process.

Issue 5: Amount to be Deposited for Waiver
Considering the facts and circumstances of the case, the Tribunal directed the applicant to deposit Rs.25 lakhs within eight weeks to waive the remaining tax, interest, and penalties. The Tribunal emphasized the importance of complying with the deposit requirement by a specified date to proceed with the case. The decision to waive the remaining amount was contingent upon the timely deposit of the specified sum, indicating a procedural step necessary for further consideration of the case.

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