2018 (11) TMI 1756 - AT - Service Tax

Classification of services - tour operator services or not - business of running ropeways installed at various places in India - no service tax was paid on the amount charged from pilgrims / tourists for the charges for using the ropeways / Udan Khatolas for visiting Maa Chandi Devi and Maa Mansa Devi - case of Revenue is that the journey from base point of either of two destination to the temple destination of Maa Mansa Devi and Maa Chandi Devi clearly comes under the definition of Tour Operator service - Circular No. 80/10/2004-ST, dated 17.9.2004 - HELD THAT - The tour as per the definition given in the Finance Act, 1994 under section 65 (113) provides that the journey from one place to another irrespective of the distance between such places amounts to a tour. However, the definition of the tour operator for the relevant period of demand requires that for being tour operator, a person should be engaged in the business of planning, scheduling, organising or arranging tours and these arrangements may also include arrangements for accommodation, sightseeing or other similar services by any mode of transport. The amended definition after 16.05.2008 of the tour operator also have the above ingredients that a person to be categorised or classified under the tour operator service. The activity undertaken by the appellant is more of a nature of providing transport facility between two fixed places. The definition of tour operator in our view, entertains not only a mere transportation of passengers /tourists but also involves a detailed planning of travel, sightseeing and other requirements for a tour. It needs planning and then detailed arrangements are to be made for transport, stay, sight seeing etc., such an activity will certainly classifiable as the tour operator but in the present case, appellants basically provides mere transportation facility which is open to pilgrims / tourists persons even villagers to go uphills and therefore, in our view, same cannot be classified and charged to service tax under the category of tour operator service. Though the definition of tour operator has got a change since 10.09.2004, however, we feel that after the amendment to the definition of tour operator, it has been made a very elaborate and specific and that for an activity to be classified as Tour operator service, the elements of detailed planning, scheduling, organising the tour which may include arrangement for accommodation, sight seeing or other similar services including the arrangements of the mode of transport need to be present - Since all these elements are absent in the present case, the appellant is not liable to pay service tax under the category of tour operator service. Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Whether the appellant's activities fall under the taxable category of 'Tour Operator' service.
2. Applicability of service tax on the ropeway services provided by the appellant.
3. Legality of invoking the extended time period for service tax demand.
4. Interpretation of the definition of 'tour operator' and 'tour' under the Finance Act, 1994.

Issue-wise Detailed Analysis:

1. Whether the appellant's activities fall under the taxable category of 'Tour Operator' service:
The appellant operates ropeways at Maa Mansa Devi and Maa Chandi Devi temples in Haridwar, Uttarakhand, providing transportation from the base point to the temples. The Department contended that these activities fall under the 'Tour Operator' service as defined in the Finance Act, 1994. The appellant argued that their activities do not involve planning, scheduling, organizing, or arranging tours, which are essential elements of a 'tour operator' as per the Act. The Tribunal agreed with the appellant, stating that the ropeway service is akin to a public transport facility and does not involve the detailed planning or organizing required for a 'tour operator.'

2. Applicability of service tax on the ropeway services provided by the appellant:
The appellant had been paying service tax on road transportation charges but not on the ropeway charges. The Department issued several show cause notices demanding service tax on the ropeway charges, asserting that the ropeway journey constitutes a 'tour.' The Tribunal referred to previous judgments, including Shail Shikhar Associates vs. CCE, Meerut I, which held that movement of trolleys between two points does not constitute a 'tour' in common parlance. The Tribunal concluded that the appellant's ropeway services do not fall under the 'tour operator' category and thus are not subject to service tax.

3. Legality of invoking the extended time period for service tax demand:
The appellant challenged the demand for service tax for the period between April 2006 to September 2006, arguing that the extended time period for issuing the show cause notice was not applicable since previous notices had already been issued for the normal period. The Tribunal agreed with the appellant, citing the Supreme Court's decision in Pushpam Pharmaceuticals Company vs. CCE, Bombay, which held that the extended time period cannot be invoked if the normal period notices were already issued.

4. Interpretation of the definition of 'tour operator' and 'tour' under the Finance Act, 1994:
The Tribunal examined the definitions of 'tour,' 'tour operator,' and 'tourist vehicle' under the Finance Act, 1994. The definition of 'tour operator' requires the person to be engaged in planning, scheduling, organizing, or arranging tours, which may include accommodation, sightseeing, or other similar services. The Tribunal found that the appellant's activities did not meet these criteria, as they merely provided a transport facility without any additional tour-related services. The Tribunal emphasized that the ropeway service is a fixed transport facility and not a planned or organized tour.

Conclusion:
The Tribunal concluded that the appellant's ropeway services do not fall under the 'tour operator' category and thus are not liable for service tax. The demand for service tax and penalties was set aside, and the appeal was allowed. The Tribunal's decision was based on the interpretation of the relevant definitions and previous judgments, which supported the appellant's contention that their activities did not constitute a 'tour' or 'tour operator' service under the Finance Act, 1994.