2009 (11) TMI 214 - AT - Service Tax

Tour operator services- The assessee was engaged by K to transport its staff from its respective residence of factory and back. The original authority demanded service tax on such contract carriage under the category of Tour operator service along with interest and penalties. The commissioner (Appeals) upheld the order. In the light of the decision of Federation of Bus Operators Association of Tamil Nadu v. Union of India 2001 (4) TMI 7 - MADRAS HIGH COURT , held that- revenue had no case that the assessee had no case that the assessee had deployed tourist vehicles for the impugned activity. As regard the period with effect from 10.09.2004, the entry covers the activity of planning, scheduling, organizing and arranging tours and includes tour operated in a tourist vehicle . Obviously transport of workers to the factory of K and back could not be held to have been the business of planning, scheduling, organizing, arranging tours . Therefore, the demand for the period w.e.f. 1.9.2004 also was not sustainable.

Summary

Issues:
1. Whether the appellants were engaged in providing 'Tour Operator' service during a specific period and failed to follow statutory formalities, leading to a demand for service tax, education cess, and penalties.
2. Interpretation of relevant legal provisions and judgments to determine the applicability of the 'Tour Operator' service to the appellants' activities.
3. Analysis of the amendments to the entry 'Tour Operator' under the Finance Act, 1994, and its impact on the case.
4. Assessment of the activities conducted by the appellants in transporting staff and the alignment of these activities with the definition of 'Tour Operator' service.

Analysis:

1. The appellants, M/s. Remanan Travels, were found to have provided 'Tour Operator' service from 1-4-2004 to 31-12-2005 without complying with statutory requirements, resulting in a demand for service tax, education cess, and penalties. The Commissioner (Appeals) upheld the original authority's decision based on judgments from the Hon'ble High Court of Madras, which considered the operation of contract carriages as part of 'Tour Operator' service. However, a conflicting view was noted in a judgment of the Hon'ble High Court of Chennai.

2. The appellants argued that the judgments relied upon did not align with the entry 'Tour Operator' during the material time and cited Tribunal decisions supporting their position. They contended that the activity of transporting employees to and from work did not constitute planning, organizing, or arranging tours as required by the law. The amendments to the entry 'Tour Operator' were crucial in determining the scope of taxable activities.

3. The Tribunal analyzed the legal provisions and judgments to ascertain the applicability of 'Tour Operator' service to the appellants' case. The entry was amended to include planning, organizing, or arranging tours by any mode of transport, which influenced the decision regarding the period from 10-9-2004 onwards. The absence of the use of tourist vehicles by the appellants further supported the conclusion that their activities did not fall under the 'Tour Operator' service.

4. Considering the activities of the appellants in transporting staff for a specific company, the Tribunal concluded that such operations did not amount to planning, organizing, or arranging tours, especially in the absence of tourist vehicles. The judgments of the Hon'ble High Courts and the consistency with Tribunal decisions reinforced the finding that the appellants were not liable for service tax under the 'Tour Operator' service. Consequently, the appeal was allowed based on the legal interpretations and factual analysis presented.