2023 (5) TMI 394 - AT - Service Tax

Classification of services - supplying aircraft/helicopter owned by it to various entities for their use - transportation of passengers by air service or supply of tangible goods service? - HELD THAT - This issue has been considered and decided by a Division Bench of this Tribunal in CHIMES AVIATION P LTD. VERSUS COMMISSIONER, SERVICE TAX NEW DELHI II 2022 (1) TMI 1016 - CESTAT NEW DELHI and it has been held that the appellant therein had provided STG services which became taxable w.e.f. 01.07.2010 - The Tribunal also held that penalties had been validly imposed upon the appellant. There is no error in the order passed by the Principal Commissioner - Appeal dismissed.

Summary

Issues Involved:
1. Confirmation of service tax demand under 'supply of tangible goods' category u/s 65(105)(zzzzj) of the Finance Act.
2. Confirmation of service tax demand under 'management, maintenance or repair service' category u/s 65(105)(zzg) of the Finance Act.
3. Imposition of interest and penalty u/s 75, 77, & 78 of the Finance Act.

Summary:
The judgment by the Appellate Tribunal CESTAT New Delhi addressed the appeal by M/s. Trans Bharat Aviation Pvt. Ltd. against the order passed by the Principal Commissioner of Service Tax, Delhi. The order confirmed a service tax demand of Rs. 2,45,50,030 under the 'supply of tangible goods' category and Rs. 75,55,212 under the 'management, maintenance or repair service' category u/s 65(105)(zzzzj) and u/s 65(105)(zzg) of the Finance Act, respectively. Additionally, interest and penalty were directed under sections 75, 77, & 78 of the Finance Act.

The appellant, M/s. Trans Bharat Aviation Pvt. Ltd., provided aircraft/helicopter services to various entities, including supplying its own crew, such as pilots, along with the aircraft/helicopter. The appellant believed these services fell under 'transportation of passengers by air' category, under which it discharged its service liability.

The main issue in the appeal was whether the services provided by the appellant should be categorized under 'transportation of passengers by air' or 'supply of tangible goods.' The Tribunal referred to a previous case involving Chimes Aviation Pvt. Ltd. and concluded that the services provided by M/s. Trans Bharat Aviation Pvt. Ltd. fell under the 'supply of tangible goods' category. The Tribunal upheld the penalties imposed on the appellant based on the findings in the Chimes Aviation Pvt. Ltd. case.

Based on the reasoning provided in the Chimes Aviation Pvt. Ltd. case, the Tribunal found no error in the order passed by the Principal Commissioner and subsequently dismissed the appeal.