2014 (12) TMI 918 - AT - Service Tax

Waiver of pre deposit - Business auxiliary service - air travel agent s service - Held that - The service rendered by the appellant herein is booking of passage for travel by air, which is squarely covered by the definition of air travel agent service as defined in Section 65(4). As per the said definition, an air travel agent means any person engaged in providing any service connected with the booking of passage for travel by air and the taxable services means any service provided or to be provided by any person by an air travel agent in relation to the booking of passage for travel by air. In view of the above statutory definitions, any activity in relation to booking of passage by air travel agent would be covered under air travel agency service . Whether the ticket is bought directly from the airline or through the GSA, the same would not make any difference. Therefore, the confirmation of demand under business auxiliary service does not appear to be prima facie sustainable in law. This is the view taken by the Tribunal in the case of Zuari Travel Corporation and the appellant s own case cited supra. Hence the appellant has made out a strong case for waiver of dues. Accordingly we grant unconditional waiver from pre-deposit of the dues adjudged against the appellant and stay recovery thereof during the pendency of the appeal - Stay granted.

Summary

Issues:
Classification of service under 'business auxiliary service' vs. 'air travel agent service'

Analysis:
The judgment pertains to an appeal against an order confirming a service tax demand for the period 2004-05 to 2011-12 on the appellant, an air travel agent. The adjudicating authority classified the service as 'business auxiliary service,' leading to the imposition of penalties. The appellant contended that they discharge service tax liability under 'air travel agent's service' when selling tickets purchased from airlines or GSAs. The appellant argued that subjecting the commission received from GSAs to service tax again under 'business auxiliary service' was unjustified. The appellant relied on a Tribunal decision in a similar case involving Zuari Travel Corporation, where it was held that purchasing and selling tickets constituted 'air travel agency service,' not 'business auxiliary service.' The appellant also cited a Tribunal order granting a stay in their own case.

The Revenue, represented by the Additional Commissioner, maintained that the appellant's receipt of a commission from GSAs promoted their business, justifying the classification as 'business auxiliary service.' After considering both parties' arguments, the Tribunal analyzed the statutory definition of 'air travel agent service' under Section 65(4) and concluded that any activity related to booking air travel passage fell under this category. The Tribunal emphasized that whether tickets were purchased directly from airlines or through GSAs did not alter this classification. Therefore, confirming the demand under 'business auxiliary service' was deemed unsustainable in law, aligning with the precedent set in the Zuari Travel Corporation case and the appellant's own case. Consequently, the Tribunal granted an unconditional waiver from pre-deposit of the dues and stayed the recovery during the appeal's pendency.

This judgment highlights the importance of correctly classifying services for tax purposes based on statutory definitions. It underscores the need for consistency in applying legal principles and precedent to ensure fair treatment for taxpayers. The decision provides clarity on distinguishing between 'air travel agent service' and 'business auxiliary service' in the context of commission transactions between agents and GSAs, setting a precedent for similar cases in the future.