2016 (3) TMI 13 - AT - Service Tax

Tour operator services - respondent had provided Tour Operator service to IFFCO is in-as-much-as, as per the contract entered with IFFCO, it transported the families and employees of IFFCO from one point to another at an agreed rate and in a luxury bus which had a permit issued under the Central Motor Vehicles Act, 1988 in relation to such vehicles. - Held that - the definition of tour operators during the relevant period covered persons engaged in business of operating tours in a tourist vehicle having a permit under the Motor Vehicle Act, 1988. In the present case there is no doubt that the service was rendered using luxury bus which was having permit under the Motor Vehicle Act, 1988 and the said bus was not a stage carriage but a contract carriage. Thus, the respondent provided tour operator service. Indeed the issue is squarely covered against the respondent by CESTAT judgement in the case of Friends Tour & Travels Vs. CCE Noida 2014 (1) TMI 44 - CESTAT NEW DELHI wherein it was held that the activity of providing buses to LG Electronics for dropping of staff was covered under definition of tour and the assessee was covered under the definition of tour operator and was liable to pay service tax under Section 65 (105) (n) read with Section 65 (115) ibid. - Decided in favor of revenue.

Summary

Issues:
1. Interpretation of the definition of "Tour Operator" under Section 65(52) of the Finance Act, 1994.
2. Determination of whether the respondent's services fall under the category of "Tour Operator" service.
3. Consideration of relevant case laws and judgments in determining the liability of the respondent for service tax.

Analysis:
The case involved an appeal by the Revenue against an Order-in-Appeal that set aside an earlier Order-in-Original confirming a demand for service tax against the respondent for providing "Tour Operator" services to a company. The primary issue revolved around the interpretation of the definition of "Tour Operator" under Section 65(52) of the Finance Act, 1994. The Revenue contended that the respondent's services clearly fell under the category of "Tour Operator" service as per the statutory definition, as the respondent organized journeys in a luxury bus with permits under the Central Motor Vehicles Act, 1988.

The Commissioner (Appeals) held that the respondent did not satisfy the definition of "Tour Operator" and thus was not liable for the service tax. However, the Revenue argued that the respondent's services indeed qualified as "Tour Operator" services based on the statutory definition. The respondent, on the other hand, claimed that they were not engaged in organizing tours but were merely transporting staff and families for specific purposes, citing various judgments in support of their position.

During the hearing, the respondent did not appear, and the Revenue cited a relevant CESTAT judgment to support their argument. The Tribunal analyzed the agreement between the respondent and the company, emphasizing that the journeys undertaken by the respondent clearly constituted tours under the law. The Tribunal also considered the judgments cited by the respondent, distinguishing them based on the specific circumstances and legal requirements.

Ultimately, the Tribunal upheld the Revenue's appeal, concluding that the respondent's services did fall under the definition of "Tour Operator" as per the law. The Order-in-Appeal was set aside, and the original demand for service tax was restored. The Tribunal's decision was based on a thorough analysis of the statutory provisions, relevant case laws, and the specific nature of the services provided by the respondent, highlighting the importance of compliance with legal definitions and requirements in determining tax liability.