2014 (1) TMI 44 - AT - Service Tax

Demand of service tax - Penalty u/s 76 & 78 - Service of Tour Operator & Rent-a-cab operator - Held that - assessee was providing buses to L.G. Electronics for dropping the staff of L.G. Electronics and was receiving the payment for the service. We find that the definition of tour is to mean a journey from one place to another irrespective the distances between such places and taxable service means any service provided to any person by a Tour operator in relation to tour. We find that there is no dispute that the activity of assessee for providing buses to L.G. Electronics for dropping of the staff is covered under the definition of the Tour and consequently the appellant/assessee is also falls under category of Tour operator. Commissioner (Appeal) in the impugned order has set aside the penalty under Section 78 of the Finance Act and reduced the penalty under Section 76 of the Act invoking the Section 80 of the Finance Act. We find that if the Section 80 is invokable then the penalty under Section 76 also cannot be imposed. We therefore find contradiction in the findings of the Commissioner (Appeal) in reducing penalty under Section 76 of the Finance Act and setting aside penalty of 78 of the Act. We therefore remand the matter back Commissioner (Appeal) Central Excise to decide the matter after considering the No. 15/2007 dated 04.04.2007 issued under Section 11C of the Central Excise Act and also decide the issue with regard the imposition penalty of under Section 76 and 78 of the Finance Act, afresh after affording hearing to the appellant - Decided partly in favour of assessee.

Summary

Issues:
Levy of service tax under 'tour operator' & 'rent-a-cab operator' service, invocation of extended period of limitation, consideration of Notification No. 15/2007 for abatement, imposition of penalties under Section 76 and 78 of the Finance Act.

Analysis:

Levy of Service Tax under 'Tour Operator' & 'Rent-a-Cab Operator' Service:
The case involved the provision of buses by the assessee to a company for staff transportation, falling under the definition of 'tour operator' service. The tribunal found the assessee liable for service tax under the 'tour operator' service as the activity clearly met the criteria of a journey from one place to another, qualifying as a tour. Additionally, the assessee was also providing cars on rent, meeting the definition of a 'rent-a-cab operator.' The tribunal upheld the confirmation of service tax under both categories against the assessee.

Invocation of Extended Period of Limitation:
The assessee did not raise the issue of the extended period of limitation before the lower authorities, and therefore, the tribunal did not entertain this argument at the appeal stage. Consequently, the tribunal held that the assessee was required to pay the service tax under the 'tour operator' and 'rent-a-cab operator' services.

Consideration of Notification No. 15/2007 for Abatement:
The tribunal noted that the assessee had brought to the attention of the Commissioner (Appeal) a notification allowing a 60% abatement under certain conditions. However, the Commissioner did not consider this notification in the impugned order. The tribunal found this to be a contradiction and remanded the matter back to the Commissioner to reevaluate the case in light of the notification and to decide on the penalties under Sections 76 and 78 of the Finance Act after providing a hearing to the appellant.

In conclusion, the tribunal upheld the liability of the assessee for service tax under the 'tour operator' and 'rent-a-cab operator' services, remanding the case back to the Commissioner for further consideration of the abatement notification and penalties under the Finance Act.