2019 (7) TMI 207 - AT - Service Tax

Business Auxiliary Services - commission received from M/s. Moneygram for the activity of transfer of money to a person located in India by the appellantassessee on behalf of M/s. Moneygram - HELD THAT - The said issue has been examined by the larger bench of this Tribunal in the case of M/S PAUL MERCHANTS LIMITED OTHERS VERSUS CCE, CHANDIGARH 2012 (12) TMI 424 - CESTAT, DELHI (LB) , wherein it has been held that the services provided by agent and sub-agents to M/s.Western Union Network Limited are export of services and not liable to service tax - Similar issue is in the case in hand, the appellant-assessee has provided servic es to M/s. Moneygram as the appellant-assessee is transferring the money on the instructions of M/s. Moneygram to their clients in India. Therefore, the said activity falls under export of services, no service tax is payable by the appellant-assessee. Business Auxiliary Service - commission received for arranging air tickets for their customers - HELD THAT - The said demand cannot be confirmed against the appellant-assessee in the light of the decision of this Tribunal in the case of TRADE WINGS LTD. VERSUS COMMISSIONER OF C. EX. SERVICE TAX, JAIPUR-I 2017 (9) TMI 257 - CESTAT NEW DELHI where it was held that The travelling public is getting only ticket with no identity linking the same to another travel agent. In such situation, it could not be said that the appellant is promoting the business of another travel agent, in their capacity as sub-agent. No such fact has been established in the impugned order by the lower authority - for the said amount of commission received by the appellant-assessee, no service tax is payable. Fee charged for filing passport applications - HELD THAT - The value of taxable services were less than the exemption limit prescribed under Notification No.6/2005-ST dt.1.3.2005 as their total amount of taxable service falls within the threshold limit, therefore, no service tax is payable by the appellant-assessee - the appellant-assessee is not liable to pay service tax. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Appeal against dropped demand of service tax and confirmed demand of service tax.

Analysis:
1. The appellant-assessee provided various services and was involved in receiving commission for arranging air tickets and charging fees for passport applications. The Revenue appealed against the dropped demand of ?70,77,944, while the appellant-assessee appealed against the confirmed demand of ?1,44,196.

2. The Revenue contended that the commission received by the appellant-assessee from M/s. Moneygram for transferring money to individuals in India should be taxed under business auxiliary service. However, the adjudicating authority dropped this demand. The Tribunal noted that similar issues had been addressed previously, where services provided to foreign entities were considered export of services and not taxable. As the appellant-assessee acted on behalf of M/s. Moneygram for money transfers, the activity was deemed as export of services, making the appellant-assessee not liable for service tax.

3. Regarding the demand for service tax on commission received for arranging air tickets, the Tribunal referenced a previous case where it was established that if there was no arrangement to promote the business of another party, the appellant could not be considered a commission agent. As the appellant-assessee was not promoting the business of another travel agent and merely engaged in the sale and purchase of tickets, no service tax was deemed payable on the commission received.

4. The Tribunal further examined the demand for service tax on fees charged for filing passport applications. It was found that the total value of taxable services provided by the appellant-assessee fell within the exemption limit prescribed under Notification No.6/2005-ST, thus making them not liable to pay service tax for this particular service.

5. Consequently, the Tribunal dismissed the Revenue's appeal against the dropped demand and allowed the appellant-assessee's appeal against the confirmed demand. The impugned order confirming the demand against the appellant-assessee was set aside, and it was determined that the appellant-assessee was not liable to pay service tax for the mentioned services.