2019 (5) TMI 256 - AT - Service Tax

Valuation - inclusion of fuel surcharge, administrative charge, passenger services fee, and airport taxes for the computation of assessable value - HELD THAT - The issue decided in the case of M/S. ASIAN AIRLINES. VERSUS CST, DELHI I 2019 (1) TMI 1172 - CESTAT NEW DELHI , where the Tribunal held against the inclusion of these charges in the taxable value for air travel service by the appellants - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Inclusion of fuel surcharge, administrative charge, passenger services fee, and airport taxes in the computation of assessable value for service tax payment.

Analysis:
1. The appellant, engaged in operating Airlines, appealed against Order-in-Original No. 23/2014-15 confirming a demand of &8377; 69,47,956/- along with penalties under the Finance Act for not including fuel surcharge, administrative charge, passenger services fee, and airport taxes in the assessable value for service tax payment.

2. The main issue revolved around whether the aforementioned charges should be included in the assessable value for service tax calculation. The appellant argued that various Tribunal decisions, including their own case, supported their stance of excluding these charges from the taxable value. The impugned order was challenged on this basis.

3. The Tribunal examined previous judgments, including one involving M/s Royal Jordanian Airlines, which established that charges like passenger service fee and airport taxes are not part of the assessable value for air travel services. The Tribunal reiterated that such charges are not to be included in the taxable value under the category of "Air Travel Service."

4. The appellant provided documents supporting their defense, such as invoices from the Airport Authority and certificates confirming service tax payment on passenger service fees. The Tribunal agreed that adding passenger service fee to the taxable value could lead to double taxation, as these charges are already part of airport services under the Finance Act.

5. The Tribunal noted that the Revenue's argument about service tax collection along with passenger service fee not falling under the Finance Act was not raised in the show cause notice. As such, the Tribunal upheld the appellant's position based on the evidence presented and previous decisions, setting aside the impugned order and allowing the appeal.

6. In conclusion, the Tribunal held that the impugned order was not sustainable based on established legal principles and previous judgments. The order-in-Appeal was deemed meritless and set aside, ultimately allowing the appeal in favor of the appellant.