2009 (3) TMI 25 - AT - Service Tax

Tour Operator service tax levied w.e.f. 1.9.97 till 19.7.98 and withdrawn from 18.7.98 - dispute relates to period 1.9.97 to 17.7.98 - denial of benefit of not. no. 40/97 in respect of amounts collected towards rent for accommodation, is not correct claim that the tax on the portion of train ticket was leviable w.e.f. 16.8.2002 only - claim for benefit of not. no. 39/97 and cum-duty benefit also requires to be considered in light of evidence to be produced by appellant matter remanded

Summary

Issues:
1. Dispute over Service Tax liability for Tour Operator services from 1.9.97 to 17.7.98.
2. Applicability of notification No. 40/97 for Service Tax calculation on hotel accommodation bills.
3. Claim regarding payments received for services rendered prior to 1.9.97.
4. Services rendered in advance for an event postponed to January 2000.
5. Service Tax on train ticket portion of tour packages.
6. Benefit of notification No. 39/97 and cum-duty benefit.

Analysis:
1. The appellant, a Tour Operator, appealed against the order confirming Service Tax demand of Rs. 10,91,634/- for the period 1.9.97 to 17.7.98. The appellant claimed that Service Tax was applicable only on 10% of the value of bills as per notification No. 40/97. The dispute arose as bills were in the name of tourists, not the appellant.

2. The Tribunal found merit in the appellant's claim regarding notification No. 40/97. It noted that the appellant paid hotel bills and collected amounts through foreign tourist agents, with the hotel bills clearly indicating the appellant as the booking agent. The Tribunal directed verification of corroborative evidence to extend the benefit of the notification.

3. Payments received for services rendered before 1.9.97, as per a French Court decision, were considered exempt from Service Tax for the disputed period. The Tribunal set aside the demand related to this amount.

4. Regarding services rendered in advance for an event postponed to January 2000, the Tribunal accepted the claim that as Service Tax was not leviable during the relevant period, the amount received in advance was not taxable, subject to verification.

5. The Tribunal acknowledged the appellant's argument that Service Tax on the train ticket portion of tour packages was applicable only from 16.8.2002, requiring further examination.

6. The Tribunal remitted the matter back to the original authority for fresh consideration in light of the observations. The appellant was directed to provide evidence within 45 days and afforded a hearing before a decision. The claims for the benefit of notification No. 39/97 and cum-duty benefit were also to be reevaluated based on evidence presented.