2008 (3) TMI 201 - AT - Service Tax

Taxability of Tour Operator Service - demand is for the period of April, 2001 to Sept. 2005 - Prior to 10-9-2004 the definition of Tour Operator was a person who hold a tourist permit granted under the Motor Vehicles Act, 1988 to undertake tour operator business hence for the demand prior to 10.9.04, no service tax is leviable, if the vehicles are not registered as Tourist Vehicles demand for the period after 10.9.04 are justified hence stay not granted completely

Summary

Issues: Taxability of services under the category of "Tour Operator"

In the judgment delivered by the Appellate Tribunal CESTAT MUMBAI, the issue at hand pertained to the taxability of services falling under the category of "Tour Operator." The case involved a demand of Rs. 99,57,862/- and an equivalent penalty imposed on the applicant for the period spanning from April 2001 to September 2005.

The Tribunal examined the definition of a Tour Operator, noting the distinction before and after September 10, 2004. Prior to this date, a Tour Operator was defined as a person holding a 'tourist permit' under the Motor Vehicles Act, 1988. However, post the aforementioned date, the definition expanded to encompass individuals engaged in planning, scheduling, organizing, or arranging tours by any mode of transport, including those operating Tour Operations in tourist vehicles covered by permits under the Motor Vehicles Act, 1988.

Referring to a previous case, CCE & Cus., Vadodara-II v. Gandhi Travels, the Tribunal observed that no service tax is leviable if the vehicles are not registered as Tourist Vehicles. Consequently, for the period preceding September 10, 2004, the Tribunal determined that the applicant was not required to make a pre-deposit based on the precedent set by the aforementioned case.

However, for the period subsequent to September 2004 to September 2005, the Tribunal found that the services rendered by the applicant could fall within the purview of the revised definition of a Tour Operator. As a result, the Tribunal directed the applicant to deposit an amount of Rs. 10 lakhs within eight weeks and report compliance by a specified date. Upon such compliance, the pre-deposit of the remaining balance was waived, and the recovery thereof stayed pending the disposal of the appeal.

The judgment, delivered by S/Shri M.V. Ravindran, Member (J) and K.K. Agarwal, Member (T), provided a detailed analysis of the taxability of services under the category of "Tour Operator," considering the evolving definition and relevant precedents to determine the applicant's liability and the requisite pre-deposit amount.