2018 (11) TMI 920 - AT - Service Tax

Levy of Service tax - Tour Operator Services - GTA Services - appellants herein are providers of tour operator services and undertak journeys of persons by buses from Vizinagaram to other places for a monetary consideration - Demand of interest and penalty - extended period of limitation. Tour Operator Services - Held that - It is not in dispute that the appellant is a tour operator with a contract carriage permit and that the tour operator services rendered by such persons have been exempted vide Notification No. 20/2009-ST dated 7.7.2009. It is also not in dispute that this notification has been made effective from 01.04.2000 by the Finance Act, 2011. Therefore, this exemption is fully applicable to the appellant for the services rendered during the relevant period - demand set aside. GTA Services - extended period of limitation - Held that - It is not in dispute that appellant had rendered these services and had subsequently discontinued this service because the RTO found it incorrect to render this service. It is also not in dispute that the appellant is not registered for the GTA services. It is also not in dispute that they had not disclosed that they are providing these services to the department and this came to light only during the investigation - there is no reason to hold that extended period of limitation cannot be invoked as the appellant had wilfully suppressed the facts from the department - demand of ₹ 6,472/- on GTA services along with interest is sustainable - penalty is set aside by invoking section 80. Appeal allowed in part.

Summary

Issues:
1. Liability of the appellant to pay service tax on Tour Operator Services and Goods Transport Agency Services.
2. Liability of the appellant to pay duty for the extended period along with interest.
3. Liability of the appellant to penalties imposed under section 77 & 78.

Analysis:
1. Tour Operator Services:
The appellant, a tour operator, undertook journeys of persons by buses without discharging service tax. The authorities found that the appellant collected a significant amount for these services but did not pay service tax. The appellant argued that a retrospective exemption notification applied to them, which the department acknowledged. The tribunal held that the exemption notification was applicable to the appellant, and thus, the service tax liability on tour operator services was set aside along with interest and penalties.

2. Goods Transport Agency (GTA) Services:
Regarding GTA services, the appellant had transported goods but discontinued the service due to objections. The appellant was not registered for GTA services and did not disclose this to the authorities. The tribunal found that the extended period of limitation could be invoked as the appellant had suppressed facts. The demand for service tax on GTA services along with interest was upheld, but penalties were set aside, considering the circumstances. The tribunal exercised its powers under section 80 of the Finance Act, 1994, to set aside the penalty.

3. Duty for Extended Period and Penalties:
The tribunal concluded that the demand for service tax on tour operator services was set aside, while the demand for service tax on GTA services along with interest was upheld. Penalties were set aside, taking a lenient view. The appeal was disposed of accordingly, with the operative part of the order pronounced in the open court.