2015 (10) TMI 2227 - AT - Service Tax

Liability of Service Tax Period from October, 2005 to September, 2012 Tour Operator Service and GSA Service Appellant contends that it is not liable to pay tax on tour operator service and GSA Service does not fall under BAS and same have offices in India not abroad Revenue contends that liability under tour operator services arise and GSA Service falls under BAS and same were given abroad Held That - It is not prudent that pre-deposit in respect of demand pertaining to tour operator service is ordered - GSAs had responsibility of promoting the business of appellant and booking tickets for special train run by Rajasthan Tourism which fall under the purview of BAS - Pre-deposit of ₹ 2.75 crores with proportionate interest is required to be made under Section 35F and Section 83 of the Finance Act, 1994 within six weeks stay granted partly.

Summary

Issues involved:
1. Stay application against service tax demand order
2. Demand pertaining to tour operator service
3. Demand related to service tax on payments to GSAs outside India
4. Jurisdiction of Rajasthan High Court over Delhi Commissionerate
5. Invocability of the extended period for demand

Analysis:
1. The appellant filed a stay application against the service tax demand order of &8377; 13,29,55,191/- issued for the period October 2005 to September 2012. The demand included amounts for tour operator service and service tax on payments to GSAs outside India under the reverse charge mechanism.

2. Regarding the demand for tour operator service, the appellant argued that a stay was deemed to have been extended by the Rajasthan High Court based on previous orders. The Tribunal noted the High Court's observation that interim orders cannot be deemed vacated if the matter has not reached a conclusion, indicating that the stay granted by the High Court continued. As the issue was identical in show cause notices from Jaipur and Delhi Commissionerates, the Tribunal found it prudent not to order a pre-deposit for the demand related to tour operator service.

3. Concerning the demand for service tax on payments to GSAs outside India, the Tribunal observed that the GSAs were responsible for promoting the appellant's business and booking tickets for special trains, falling within the scope of promotion or marketing services. The Tribunal found that some GSAs did not have offices in India, and the demand was raised only for payments made to such GSAs.

4. Addressing the jurisdiction issue, the Tribunal acknowledged that the Rajasthan High Court did not have jurisdiction over the Delhi Commissionerate. However, due to the similarity of issues between the show cause notices from Jaipur and Delhi Commissionerates regarding tour operator service, the Tribunal decided not to order a pre-deposit for that demand.

5. The appellant raised a contention regarding the invocability of the extended period for demand. The Tribunal found that the services provided by GSAs clearly fell within the purview of business auxiliary service, with no scope for confusion.

6. In conclusion, the Tribunal ordered a pre-deposit of &8377; 2.75 crores with proportionate interest to meet statutory requirements. Compliance was mandated within six weeks, with recovery of the remaining adjudicated liability stayed pending the appeal. Default in compliance would result in the dismissal of the appeal for failure to pre-deposit.

7. A miscellaneous application seeking early hearing was dismissed by the Tribunal, citing older pending appeals as a reason for not granting early hearing in this case.