2023 (8) TMI 745 - AT - Service Tax

Classification of Service - Tour Operator Service or not - appellant was transporting passengers, but the buses were in possession of Tourist Permit - N/N. 20/2009 -ST dated 07.07.2009 - time limitation - HELD THAT - The Commissioner has observed that the 25 tourist permits issued by the Secretary, State Transport Authority contain the details of tourist passenger places where passengers will travel and the tour programme would be conducted as per the dates mentioned in the permit. He has also examined the copies of contracts which were available on record wherein it is established that the appellant was providing the services of tour operator by providing their buses for marriage, parties, picnic parties etc. From the records available, the Commissioner has held that there are no documents available in the record and nor had the appellant submitted any documents which shows that they are eligible for the exemption in terms of the notification. The appellant has not been able to discharge the onus on him prove his case that they are eligible for exemption under the said notification. Despite clear directions of this Tribunal to the adjudicating authority to determine the eligibility of the appellant for the benefit of the said notification, keeping in view the fact that the vehicles involved were tourist vehicles and not stage carriages, he has failed to produce the relevant documents to support his contention that he did not fall within the exclusion condition of the Notification. Time limitation - appellant has pleaded there was confusion in regard to the definition of Tour Operator - penalty - HELD THAT - It is apparent that definition of tour operator has been amended from time to time since it was brought into the service tax net. Therefore, it has to be acknowledged that there may have been confusion to the scope of this service, and the benefit should go the taxpayer - the demand upheld for the normal time period, and the demand for the extended period set aside. The penalty is also modified accordingly. Appeal allowed in part.

Summary

Issues Involved:
1. Classification of services provided by the appellant.
2. Eligibility for exemption under Notification No. 20/2009-ST.
3. Validity of the demand raised by the Commissioner.
4. Applicability of the extended period for raising the demand.
5. Imposition of penalties under Section 78 of the Finance Act, 1994.

Summary:

1. Classification of Services Provided by the Appellant:
The appellant, engaged in interstate and intrastate passenger transport services, was alleged to be providing taxable services as a "Tour Operator" due to the possession of tourist permits for their buses. The Commissioner confirmed the demand under the category of Tour Operator Service on the basis that the services rendered were towards tourism, conducted tours, charter, or hire services.

2. Eligibility for Exemption under Notification No. 20/2009-ST:
The Tribunal had previously remanded the matter to the Adjudicating Authority to examine the appellant's eligibility for exemption under Notification No. 20/2009-ST dated 07.07.2009. The Commissioner, in the de novo adjudication, held that the appellant did not provide sufficient evidence to prove that the receipts were from passenger transportation only and not from tourism, conducted tours, charter, or hire services. The Commissioner observed that the appellant's vehicles were tourist vehicles and not stage carriages, thus not eligible for the exemption.

3. Validity of the Demand Raised by the Commissioner:
The appellant contended that the impugned order was beyond the scope of the show cause notice and that the Commissioner confirmed the demand on a different ground. The Tribunal found that the Commissioner had examined the issue afresh as per the Tribunal's directions and that the appellant failed to establish their eligibility for the exemption.

4. Applicability of the Extended Period for Raising the Demand:
The appellant argued that the show cause notice was time-barred due to no suppression of facts. The Tribunal acknowledged the confusion regarding the definition of "Tour Operator" over time and upheld the demand for the normal time period while setting aside the demand for the extended period.

5. Imposition of Penalties under Section 78 of the Finance Act, 1994:
The Tribunal modified the penalty imposed under Section 78 in light of the confusion surrounding the definition of "Tour Operator" and the appellant's failure to provide sufficient evidence to support their claims.

Conclusion:
The Tribunal partially allowed the appeal, upholding the demand for the normal time period and setting aside the demand for the extended period. The penalty was modified accordingly.