2016 (3) TMI 164 - AT - Service Tax

Taxability - Tour Operator Services - Whether providing package tour service comes under the ambit of Tour Operator Services - Appellant providing Jet Escapes packages to the customers to increase their revenue by giving the facilities of transportation, stay and sight seeing as package tour - Held that by relying on the decision taken by the Tribunal in the case of T.N. State Trans. Corpn., Kumbakonam Ltd. 2009 (2) TMI 90 - CESTAT CHENNAI, where the tour operator service means the person should be engaged in the business of planning, scheduling or arranging the tours. In the absence of any such activity undertaken, the services cannot be considered as tour operator service. - the appellant herein has not planned, scheduled or organized tours for their passengers. - the appellant is not covered under the category of tours operator service . - Decided in favor of assessee.

Summary

Issues:
Whether the appellant's activity falls under taxable service as a "tour operator service."

Analysis:
The case involved a dispute regarding the appellant, who operated airlines and offered package tours to customers in collaboration with hotels. The Revenue claimed the appellant was liable to pay service tax under the category of "tour operator services." The appellant contested the show cause notice on grounds of merit and limitation, but both the adjudicating authority and the first appellate authority upheld the demands with penalties. The key issue was whether the appellant's activity qualified as a taxable service under "tour operator service."

The definition of "tour operator" under Section 65(115) of the Finance Act, 1994, was crucial in determining the appellant's liability. The definition covers persons engaged in planning, scheduling, organizing, or arranging tours, including accommodation and sightseeing services. The appellant, however, primarily offered Jet Escapes Packages without actively planning or organizing tours for customers. The Tribunal analyzed previous cases to establish that the appellant's services did not align with the definition of "tour operator services" as they did not engage in planning or scheduling tours for passengers.

The Tribunal referred to the case law to emphasize that the appellant's activities did not meet the criteria of a tour operator service. The Tribunal highlighted that the appellant's services did not involve planning, scheduling, or organizing tours for passengers, as required by the definition. Therefore, the Tribunal concluded that the appellant was not covered under the category of "tour operator service" and set aside the impugned order, allowing the appeal.

In conclusion, the Tribunal held that the appellant's activities did not constitute taxable service under "tour operator service" as they did not engage in planning, scheduling, or organizing tours for customers. The judgment emphasized the importance of meeting the specific criteria outlined in the legal definition for a service to be considered taxable under the relevant category.