2023 (3) TMI 297 - AT - Service Tax

Levy of Service tax - Tour Operator Services - running of ropeways from base stations to temples and transportation on road between base station of the temples - HELD THAT - The appellant placed reliance upon the decision rendered in the case of the appellant in M/S. / USHA BRECO LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, DEHRADUN 2018 (11) TMI 1756 - CESTAT NEW DELHI for the period from September 2004 to March 2014 to contend that the demand confirmed by the Commissioner (Appeals) should be set aside - it was held in the case that in the present case, appellants basically provides mere transportation facility which is open to pilgrims/tourists persons even villagers to go uphills and therefore, in our view, same cannot be classified and charged to service tax under the category of tour operator service. The facts of the present case are identical to the facts of the aforesaid decision of the Tribunal rendered in the case of the appellant - In view of the aforesaid decision, it has to be held that the activity undertaken by the appellant cannot be subjected to service tax under the category of tour operators . Appeal allowed.

Summary

Issues:
1. Interpretation of 'tour operators' service under section 65 (115) of the Finance Act, 1994.
2. Tax liability on ropeway rides and transportation services.
3. Applicability of service tax on special/package tickets.
4. Comparison with previous legal decisions for setting aside tax demand.

Analysis:
1. The case involved a challenge to an order by the Commissioner (Appeals) regarding the appellant's provision of 'tour operators' service under section 65 (115) of the Finance Act, 1994. The appellant operated ropeways in Haridwar, offering various ticket types for passengers, including combined tickets for rides in two ropeways. The issue centered on whether the appellant's activities fell within the scope of 'tour operators' service as defined by the law.

2. The appellant faced a show cause notice proposing service tax on running ropeways and road transportation between temples under the 'tour operators' services category. The Additional Commissioner confirmed the tax demand, which was partially upheld by the Commissioner (Appeals) in the subsequent order. The appeal primarily focused on the tax liability related to special/package tickets and the exclusion of other ticket types from the tax demand.

3. The appellant's counsel relied on a prior decision involving the appellant to argue against the tax demand. The decision highlighted the distinction between mere transportation services and activities qualifying as 'tour operator' services. It emphasized the need for detailed planning, scheduling, and organizing of tours beyond basic transportation to classify an activity as 'tour operators' service. Drawing parallels with the previous decision, the Tribunal concluded that the appellant's ropeway operations did not meet the criteria for service tax under the 'tour operators' category.

4. In light of the legal precedent and analysis, the Tribunal set aside the Commissioner (Appeals)'s order confirming the service tax demand. The decision underscored the nature of the appellant's activities as providing transport facilities rather than comprehensive tour planning, aligning with the interpretation that 'tour operators' service entails more than basic transportation services. As a result, the appeal was allowed, and the service tax demand on the appellant was overturned.

This comprehensive analysis delves into the legal intricacies of the judgment, addressing each issue raised in the case and providing a detailed examination of the arguments, legal interpretations, and outcomes related to the appellant's tax liability for ropeway operations under the 'tour operators' service category.