2014 (6) TMI 491 - AT - Service Tax

Waiver of pre-deposit - tour operator service - domestic and international tour packages - export of services - valuation - Held that - According to the table furnished by the petitioner the tax liability component on domestic tour packages (after including the amounts received towards air tickets) is Rs.2,28,643/-, on international tour packages (within the normal limitation period) Rs.2,06,116/- and penalty of interest thereon. - assessee directed to deposit Rs. 10 lakhs (Rupees Ten lakhs), to cover the prima facie liability of tax, interest and penalties on the aforesaid two components of the taxable service. - stay granted partly. Refund of excess pre-deposit - Revenue recovered Rs.29,53,000/-. High Court directed the revenue that it is willing to permit Revenue to retain 50% of the said amount provided Revenue refunds the balance of 50% i.e. Rs.14,76,500/- - Held that - pursuant to the order of the Karnataka High Court 2013 (6) TMI 644 - KARNATAKA HIGH COURT , Revenue had refunded Rs.14,76,500/- to the assessee. In the light of our prima facie analysis of the petitioner s liability and the conditional order of pre-deposit and stay of further proceedings pursuant to the adjudication order, as mentioned earlier herein, we direct Revenue to refund to the assessee Rs.4,76,500/- within two weeks from the date of this order - Decided in favour of assessee.

Summary

Issues:
Waiver of pre-deposit and stay of further proceedings sought by the appellant based on the adjudication order determining taxable values for services provided as a tour operator.

Analysis:
The adjudicating authority determined the gross value received for taxable services provided by the appellant as a tour operator, including amounts received for international and domestic tour packages. The authority confirmed the service tax demand, interest, and penalties based on the findings of the audit of the appellant's records.

The appellant failed to remit service tax for international tour packages provided, claiming abatement and excluding amounts received for air tickets from the taxable value. The authority found discrepancies in the appellant's declarations and concluded that service tax was leviable based on the gross value received.

Regarding international tour packages, the appellant argued that services provided abroad were not assessable to service tax. However, the authority determined that since the services commenced and concluded in India, with payments received in Indian rupees, the territorial nexus justified the levy of tax under the Act.

The authority invoked the extended period of limitation due to the appellant's mis-declaration of taxable values, leading to non/short payment of service tax. The appellant contended that they believed international tour packages were not taxable based on a Trade Notice and Circular. The Tribunal deferred detailed consideration of the extended period's legitimacy for the final hearing.

Considering the appellant's liability, the Tribunal granted waiver of pre-deposit and stay of proceedings on the condition of a deposit to cover the prima facie tax liability. The Karnataka High Court directed the Tribunal to address the balance of the tax demand, leading to a refund of a portion of the amount recovered by the Revenue to the appellant.

In conclusion, the Tribunal directed the Revenue to refund a specific amount to the appellant based on the prima facie analysis of the liability and the conditional order of pre-deposit and stay of further proceedings. The stay application was disposed of accordingly.