2015 (10) TMI 2226 - AT - Service Tax

Liability of Service Tax Demand made for outbound tours, booking of air ticket of overseas clients, advertisement agency service, CRS/GDS and denial of abatement of 67% - Held That - Demand in relation to outbound tours is not sustainable Decision made in case of Cox and Kings India Ltd. 2013 (12) TMI 1024 - CESTAT NEW DELHI followed. Demand pertaining to booking of air tickets for overseas clients not liable to service tax as clients were based abroad and payment was received in foreign exchange Decision made in the case of B.A. Research India Ltd. 2009 (11) TMI 213 - CESTAT, AHMEDABAD followed - Demand for advertisement agency service already remitted. Regarding CRS/GDS Decision made in the case of Riya Tours and Travels 2010 (7) TMI 774 - BOMBAY HIGH COURT followed wherein pre-deposit of 25% of demand pertaining to normal period of one year was ordered. Demand for denial of abatement under Notification No. 1/2006 is covered in the case of Punj Lloyd 2015 (10) TMI 2294 - CESTAT NEW DELHI which took note of case of Nicholas Piramal (India) Ltd. 2009 (8) TMI 224 - BOMBAY HIGH COURT . Pre-deposit of ₹ 4.5 crores would meet the requirement of Section 35F of Central Excise Act, 1944 read with Section 83 of Finance Act, 1994 - Stay granted partly.

Summary

Issues: Stay application against service tax demand confirmed in order-in-original.

Outbound tours:
The appellant argued that the demand related to outbound tours is unsustainable, citing a favorable judgment by CESTAT in the case of Cox & Kings India Ltd. The Tribunal found the demand not sustainable based on the precedent.

Booking of air tickets for overseas clients:
The appellant contended that the demand for booking air tickets for overseas clients is not sustainable as the service was rendered abroad, supported by a judgment in the case of CST Vs. B.A. Research India Ltd. The Tribunal agreed, considering the service as export of service and hence not liable to service tax.

Advertisement agency service:
The demand concerning advertisement agency service had already been paid by the appellant, which was acknowledged.

CRS/GDS income:
Regarding the demand related to CRS/GDS income, the appellant referred to a Bombay High Court decision in the case of M/s Riya Travel and Tours (I) Pvt. Ltd. The Tribunal decided to follow the precedent and ordered a 25% pre-deposit of the demand for one year.

Denial of abatement:
The appellant argued that the demand arising from the denial of abatement due to taking Cenvat credit was not sustainable as the credit was reversed monthly. The Tribunal found the case covered by the CESTAT decision in the case of M/s Punj Lloyd Ltd. and ordered a pre-deposit of Rs. 4.5 crores.

The Tribunal ordered the pre-deposit within four weeks, stating it would meet the statutory requirements. Compliance was to be reported by a specified date, and recovery of the remaining liability was stayed pending appeal. Failure to comply would result in dismissal of the appeal. Any amount already paid towards the demand would be considered part of the pre-deposit. Additionally, a miscellaneous application for early hearing was disposed of.