2008 (4) TMI 136 - AT - Service Tax

Transporting employees of one company from different places to their offices and back; they have collected charges for impugned services, applicant is liable to pay service tax as tour operator - we do not find prima facie any evidence of intention to evade payment of tax or suppression hence substantial amount out of the total demand may be hit by time-bar therefore stay is granted partly

Summary

Issues: Liability of service tax as a tour operator for transporting employees of a company. Time-bar on the demand amount.

Liability of service tax as a tour operator for transporting employees of a company:
The case involved M/s. Himachal Road Transport Corporation providing transportation services to M/s. Gujarat Ambuja Cement Limited for their employees. The Department contended that the applicant should pay service tax as a tour operator for carrying the workers of the company. The terms "tour" and "tour operator" were examined, and it was noted that they were broad enough to cover the operations conducted by the applicant. However, there was no evidence of an intention to evade tax or suppress relevant facts from the authorities. Consequently, a substantial portion of the total demand, amounting to Rs. 7,59,449/-, was considered time-barred due to lack of evidence of intentional evasion.

Time-bar on the demand amount:
Considering the overall facts and circumstances, the Tribunal directed the applicant to deposit Rs. 1,00,000/- within six weeks and report compliance by a specified date. Upon this deposit, the balance amount of tax and penalty imposed on the appellant was waived, and the recovery was stayed pending the appeal's disposal. This decision was made after a thorough evaluation of the case and the lack of evidence indicating an intention to evade tax obligations.