2015 (8) TMI 1187 - AT - Service Tax

Tour operators service - whether the appellants are liable for service tax for the contract carriage operated for carrying passengers from one city to the other - Held that - The Govt. exempted the contract carriage permit operators under tour operator service from service tax by Notification No. 20/2009-ST dated 07.07.2009. This notification has been given a retrospective effect vide Finance Act, 2011. The case is now stand covered by retrospective amendment introduced in the Finance Act, 201 w.e.f. 08.04.2011. - exemption had been given with retrospective effect from 01.04.2000 . On perusal of records I find that the appellants had operated contract carriage for carrying passengers from point to point as is evident from the photocopies of tickets issued by the appellant to the individual passengers which shows the destination from Coimbatore to Chennai, Coimbatore to Ernakulam and Coimbatore to Pondicherry etc. Therefore, by virtue of exemption given by the Govt. with retrospective effect from 01.04.2000, the service provided by the appellant as a tour operator having a contract carriage permit for inter-State or intra-State transportation of passengers are exempted from service tax. Accordingly, the impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
1. Liability for service tax on contract carriage operations for carrying passengers between cities.

Analysis:
The appeal in question arose from an Order-in-Appeals dated 30.09.2005, where the Department demanded service tax from the appellants for operating transportation of passengers under a contract carriage permit. The demand amount was &8377; 12,60,129/- for the period 01.04.02 to 31.03.04, along with an imposed penalty, which was upheld by the Commissioner (Appeals).

The key issue to be determined in this case was whether the appellants were liable for service tax for their contract carriage operations transporting passengers between cities. The Government had exempted contract carriage permit operators under tour operator service from service tax through Notification No. 20/2009-ST dated 07.07.2009, with retrospective effect from 01.04.2000. The Finance Act, 2011, introduced a retrospective amendment validating this exemption.

The Tribunal noted that the appellants had indeed operated contract carriages for carrying passengers between specific points, as evidenced by tickets issued to individual passengers showing destinations like Coimbatore to Chennai, Coimbatore to Ernakulam, and Coimbatore to Pondicherry. Therefore, considering the retrospective exemption granted by the Government from 01.04.2000, the service provided by the appellants as a tour operator with a contract carriage permit for inter-State or intra-State passenger transportation was exempt from service tax.

Consequently, the Tribunal set aside the impugned order demanding service tax and penalty, allowing the appeal in favor of the appellants. The operative part of the Order was pronounced in the Open Court on 07.11.2014.