2017 (3) TMI 121 - AT - Service Tax

Levy of tax - Tour Operator Services - demand on the ground that the buses had contract carriage permit - Held that - the levy of Service Tax on such contract carriage under Tour Operator has been settled in the case of COMMR. OF SERVICE TAX, AHMEDABAD Versus PATEL TOURS & TRAVELS 2010 (7) TMI 298 - CESTAT, AHMEDABAD , where it was held that unless the vehicle of the contract carriage permit holder fulfills the requirement as mentioned in Central Motor Vehicles Rules of a tourist vehicle , merely because he is holding the contract carriage permit, he does not become liable to tour operator service - demand in this case is for the period prior to 11.05.2008 and hence the demand cannot be sustained and is required to be set aside. Business Auxiliary Service - commission received for booking of tickets - Held that - Business Auxiliary Service comprises of a set of services. It is important to classify the activity under the specific sub clause before confirming the demand - In the Tribunal s decision in the case of United Telecom Ltd 2010 (10) TMI 348 - CESTAT, BANGALORE , the Tribunal has held that Service Tax liability cannot be confirmed without mentioning the specific sub clause under which the activities are covered - demand cannot be sustained. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Service Tax demand under "Tour Operator Services"
2. Service Tax demand under "Courier Agency Service"
3. Service Tax demand under "Business Auxiliary Service"

Analysis:

1. Service Tax demand under "Tour Operator Services":
The appellant was engaged in providing services as a tour operator, business auxiliary services, and courier services. The Revenue alleged non-payment of Service Tax on taxable receipts for a certain period and issued a Show Cause Notice in 2008. The Original Adjudicating Authority confirmed a demand of Service Tax along with interest and penalties. The Commissioner (Appeals) upheld this order, leading to the present appeal. The appellant argued that the demand under "Tour Operator Services" was not valid for the period before 11.05.2008, as the definition was amended to include point-to-point services only after that date. The Tribunal referred to previous cases and held that the buses operated by the appellant did not qualify as tourist vehicles under the definition of "Tour Operator Services" before the mentioned amendment. Therefore, the demand for this category was set aside.

2. Service Tax demand under "Courier Agency Service":
A demand for Service Tax was raised under the category of "Courier Agency Service" based on the amount collected by the appellant for renting space on buses for carrying luggage. The Tribunal found that this activity of renting space on buses did not fall within the definition of a "Courier Agency Service." Therefore, the demand under this category was also set aside.

3. Service Tax demand under "Business Auxiliary Service":
The demand for Service Tax under "Business Auxiliary Service" was made on the commission received for booking tickets. The Tribunal noted that the specific sub-clause under which the activity fell was not mentioned to confirm the liability. Referring to a previous decision, the Tribunal held that the demand for Service Tax could not be sustained without classifying the activity under the specific sub-clause. Consequently, the demand under "Business Auxiliary Service" was set aside, and the appeal was allowed.

In conclusion, the Tribunal set aside the demands for Service Tax under all three categories - "Tour Operator Services," "Courier Agency Service," and "Business Auxiliary Service" - based on the arguments presented and the legal interpretations provided. The impugned order was overturned, and the appeal was allowed in favor of the appellant.