2019 (12) TMI 341 - AT - Service Tax

Extended period of limitation - Classification of services - Rail Travel Agents Service or not - consideration received from Gallilieo Amadus for using their platform for booking air ticket - Circular No. 334/8/2016-TRU dated 29.02.2016. HELD THAT - There is no dispute on the fact that there was confusion about classification and taxability of the service of CRS system used by the appellant, therefore the demand is restricted to normal period limitation. The demand for extended period is not sustainable - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Liability to pay service tax on consideration received from Gallileo & Amadus for using their platform for booking air tickets.
2. Whether the demand is time-barred.

Analysis:

Issue 1: Liability to pay service tax on consideration received from Gallileo & Amadus for using their platform for booking air tickets:
The appellant argued that there was confusion regarding the taxability of the service due to a circular issued by the board in 2016. The appellant's representative cited judgments in support of the confusion regarding the use of the CRS system. The Revenue representative contended that the service provided by the appellant is taxable. The Tribunal found that there was confusion about the classification and taxability of the service, citing a previous judgment where demand for the extended period was deemed unsustainable. The Tribunal referred to the D-pauls case, emphasizing that the service provided by the appellant falls under Business Auxiliary Service. The Tribunal concluded that service tax is leviable on the amount received by the appellant from CRS companies under the category of Business Auxiliary Service. However, due to the confusion and uncertainty regarding the levy of service tax on incentives received, the demand was restricted to the normal period limitation, and no penalty was imposed on the appellant.

Issue 2: Whether the demand is time-barred:
The Tribunal found that due to the confusion surrounding the taxability of the service, the demand for the extended period was not sustainable. Therefore, the impugned order was set aside on the grounds of limitation, and the appeal was allowed.

In conclusion, the Tribunal held that the demand for the extended period was not sustainable due to the confusion regarding the taxability of the service provided by the appellant. The judgment emphasized the classification of the service under Business Auxiliary Service and restricted the demand to the normal period limitation, with no penalty imposed on the appellant.