2018 (8) TMI 490 - AT - Service Tax

Tour operator service - N/N. 20/2009-ST - effect of amendment - The demand was confirmed on the services of tour operator for the period prior to 07.07.2009 - Held that - The Finance Bill in the Finance Act, 2011, N/N. 20/2009-ST dated 07.07.2009 was given retrospective effect vide section 72 of Finance Act, 2011, whereby the services of Tour operator was exempted from 1st April, 2009. The period in the present case is 01.10.2001 to 30.09.2006 which is covered by retrospective effect vide exemption N/N. 20/2009-ST which was retrospectively validated from 1st April, 2000. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Exemption of services for a tour operator under retrospective effect.
2. Validity of demand confirmed on services of a tour operator for a specific period.

Analysis:
Issue 1: The appellant contended that the demand confirmed on the services of a tour operator was not valid due to exemption under notification no. 20/2009-ST, which exempted services retrospectively from 01.04.2000 till 13.09.2016. The appellant argued that the services were exempted under the Finance Act, 1994 for a tour operator with a contract carriage permit. The Tribunal noted that the Finance Act, 2011 notification No. 20/2009-ST dated 07.07.2009 provided retrospective exemption to tour operators from 1st April 2009. The period in question in the case was from 01.10.2001 to 30.09.2006, falling within the retrospective effect of exemption notification No. 20/2009-ST from 1st April 2000. Consequently, the demand confirmed by the Adjudicating Authority and upheld by the Commissioner was deemed unsustainable. The Tribunal allowed the appeal and set aside the impugned order, granting the appellant the opportunity to seek a refund through the proper authority in accordance with the law.

Issue 2: The Tribunal observed that the demand was confirmed on the services of a tour operator for the period before 07.07.2009. The retrospective exemption provided under notification No. 20/2009-ST from 1st April 2000 covered the period in question, i.e., 01.10.2001 to 30.09.2006. As a result, the demand confirmed by the lower authorities was considered not sustainable. While the Tribunal could not address the issue of refund directly, it granted the appellant the liberty to approach the appropriate authority for the refund, which should be processed in accordance with the law. The impugned order was set aside, and the appeal was allowed based on the above considerations.

This judgment highlights the significance of retrospective exemptions under the Finance Act and the necessity for authorities to align their decisions with the applicable legal provisions to ensure the proper application of tax laws in the context of services provided by tour operators.