2014 (12) TMI 833 - AT - Service Tax

Services provided by APSRTC a State Owned organization - Service of tours of marriage parties excursions party meetings etc. - services of transporting of company employees - Held that - From the records we find that the assessees are only renting their vehicles. We also find that the department could not bring out on record that the assessees are engaged in the business of planning scheduling organizing or arranging tours. In these circumstances the assessees cannot be termed as tour operators. Therefore the demands of Service Tax against them are not sustainable in law. - Decided in favor of assessee.

Summary

Issues involved:
Service tax demand for specific services provided by a state-owned organization, classification as a tour operator, liability under the Finance Act, 1994, interpretation of relevant legal definitions, applicability of extended period for demand, consideration of vehicles used in service provision.

Detailed Analysis:

1. Service Tax Demand: The judgment addresses a service tax demand of &8377; 8,82,30,629/- with penalties for the period April 2007 to March 2009. The demand is based on services provided by the state-owned organization, including tours for marriage parties, transporting company employees, and contract carriages.

2. Classification as Tour Operator: The central issue revolves around classifying the organization as a "Tour Operator" under the Finance Act, 1994. The definition of a "Tour Operator" is crucial, especially in relation to planning, scheduling, and organizing tours by any mode of transport, as per the Act.

3. Interpretation of Legal Definitions: The judgment extensively analyzes the legal definitions of a "Tour Operator" under the Finance Act, 1994. It compares the definitions applicable during different periods and scrutinizes whether the organization's activities align with the criteria set forth in the law.

4. Applicability of Extended Period: The judgment delves into the aspect of invoking an extended period for the service tax demand. It examines the validity of invoking such a period based on the information provided and the timing of submissions by the organization.

5. Consideration of Vehicles Used: Another significant aspect is the consideration of the vehicles used by the organization in providing services. The judgment evaluates whether the nature of the vehicles, such as contract carriages, impacts the organization's classification as a tour operator and its liability under the Act.

6. Precedent Decision: The judgment references a precedent decision of the Tribunal to support its findings. It emphasizes the importance of the organization's activities aligning with the definition of a tour operator to determine liability for service tax and penalties.

7. Waiver of Predeposit: Based on the analysis and precedent decision, the judgment concludes by granting a waiver of predeposit and a stay against recovery during the appeal's pendency, considering the organization's prima facie case for complete waiver.

By meticulously examining the legal definitions, activities of the organization, and precedent decisions, the judgment provides a comprehensive analysis of the issues involved in determining the liability for service tax and penalties under the Finance Act, 1994.