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2024 (3) TMI 800 - AT - Service TaxInvocation of Extended period of limitation - classification of services under Business Support Services or not - HELD THAT - From the fact that several show cause notices have been issued by the Department, it cannot be said that the Department is not aware of the allegations now being made in the instant show cause notice. The facts were in the knowledge of the Department. In fact, the learned Counsel for the appellant has referred to Order-in-Appeal No.278/2013 dated 19.07.2013, where the show cause notice dated 5.4.2010 was under challenge wherein the demand pertained to the period May, 2006 to September, 2008 for rendering the services towards arranging travel of clients covered under the Business Support Services . The show cause notice was confirmed by the order-in-original dated 13.06.2011 by the Addl. Commissioner of Service Tax, Bangalore and on the same being challenged by the appellant, the Commissioner (Appeals) held the demand under the Business Support Services as unsustainable, observing that it is not the case of the Department that the assistance provided by them is used for the purpose of business or commerce referring to the Circular No.109/03/09 dated 23.03.2009 issued by the Board. In view of these facts, the issue of limitation is squarely covered by the decision of the Supreme Court in Nizam Sugar Factory 2006 (4) TMI 127 - SUPREME COURT where the Court held that the allegation of suppression of facts against the appellant cannot be sustained, when the first show cause notice was issued all the relevant facts were in the knowledge of the authorities. The assessee was under statutory obligation of self-assessment to disclose the requisite details and pay the correct service tax amount and non-disclosure thereof amounts to suppression of material facts from the Department and therefore, the extended period of limitation of 5 years from the relevant date can be invoked under Section 73(1) of the Act - The allegation of suppression of facts have been buttressed on the ground that by virtue of the audit of the accounts by the Central Excise Revenue Audit (CERA) of the Chennai location of the assesse it came to knowledge that they were charging the management fee which is in addition to the price of the ticket. As the issue on limitation has already been answered by the decision of the Apex Court in Nizam Sugar Factory 2006 (4) TMI 127 - SUPREME COURT and also by the Tribunal in M/s G. D. Goenka 2023 (8) TMI 995 - CESTAT NEW DELHI , there is no reason for us to differ from that view and following the same, we are of the considered opinion that the department cannot invoke the extended period of limitation and therefore the demand in so far as it falls beyond the normal period of limitation is unsustainable and is accordingly set aside. The appellant merely facilitates and assist the individuals who are travelling on which no service tax is leviable for the simple reason that service tax is charged on the service provided. The services in question does not fall within the scope of Business Support Service and therefore no service tax is leviable under the said category. The Larger Bench in Kafila Hospitality and Travels Pvt Ltd. 2021 (3) TMI 773 - CESTAT NEW DELHI (LB) had observed that the definition of air travel agent includes all services connected with or in relation to the booking of passage for travel by air. The miscellaneous services rendered by the appellant are also in furtherance of the travel agent service to its customers and hence cannot be classified under the Business Support Service . The learned Counsel has further argued that no reliance can be placed on the Board s Circular No.137/6/2011- ST dated 20.04.2011 as relied on by the Commissioner in the impugned order. There are force in the submissions of the learned Counsel that services have to be classified in terms of section 65A/66F of the Act - the Larger Bench in the case of Kafila Hospitality 2021 (3) TMI 773 - CESTAT NEW DELHI (LB) also dealt with the similar contention where the two competing entries were ATA service and BAS and relying on the provisions of section 65A(2)(a) of the Act concluded that the classification of the service would fall under air travel agent services and not business auxiliary service. Applying the same principle, we are of the view that the services rendered by the appellant being in connection with the air travel agent service has to be classified therein and not under the business support service as claimed by the Revenue. Since the issue decided on merits in favour of the appellant and also on the issue of extended period of limitation there is no need to go into the question of interest or penalty. The appeal filed by the Revenue on the plea that the demand for the period 2010-2011 is within the period of five years also does not survive in view of the issue decided on extended period of limitation and on merits. The impugned order needs to be set aside - the appeal filed by the assessee is accordingly allowed.
Issues Involved:
1. Invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994. 2. Classification of services under "Business Support Services" and the applicability of service tax on 'management fees'. 3. The appellant's compliance with service tax liability under Rule 6(7) of the Service Tax Rules, 1994. 4. The Department's awareness of the appellant's service tax liability and previous show cause notices. Summary: 1. Invocation of the Extended Period of Limitation: The appellant contested the demand of service tax by invoking the extended period of limitation, arguing that the Department was aware of similar facts from earlier proceedings, and thus, the extended period of limitation could not be invoked. The Tribunal referred to the Supreme Court's decision in Nizam Sugar Factory, which held that once the Department is aware of the facts, further show cause notices cannot invoke the extended period on the same grounds. The Tribunal concluded that the Department was aware of the appellant's service tax liabilities due to previous show cause notices and thus, the extended period of limitation could not be invoked. Consequently, the demand for the period beyond the normal limitation period was set aside. 2. Classification of Services and Management Fees: The appellant argued that the services rendered, including planning travel itineraries and preparing travel-related reports, should not be classified under "Business Support Services" as they were incidental to the "Air Travel Agent" services. The Tribunal agreed, referencing the case of Modiline Travel Services Pvt. Ltd., where similar services were classified under "Air Travel Agent" services and not "Business Auxiliary Services". The Tribunal concluded that the services in question did not fall within the scope of "Business Support Services" and thus, no service tax was leviable under that category. 3. Compliance with Service Tax Liability under Rule 6(7): The appellant had been discharging service tax liability under Rule 6(7) of the Service Tax Rules, 1994, which pertains to "Air Travel Agent" services. The Tribunal noted that any consideration received over and above the taxable value prescribed under the rules could not be subjected to service tax under a different category. The Tribunal emphasized that the definition of "Air Travel Agent" includes all services connected with booking air travel, and thus, the appellant's additional services were also covered under this category. 4. Department's Awareness and Previous Show Cause Notices: The Tribunal found that the Department had issued several show cause notices to the appellant in the past, indicating their awareness of the appellant's service tax liabilities. The Tribunal cited the Supreme Court's decision in Nizam Sugar Factory, which held that once the Department is aware of the facts, further show cause notices on the same grounds cannot invoke the extended period of limitation. The Tribunal concluded that the Department's claim of suppression of facts was unsustainable as the facts were already known to them. Conclusion: The Tribunal set aside the impugned order, allowing the appeal filed by the assessee and dismissing the cross appeal filed by the Revenue. The Tribunal found that the extended period of limitation could not be invoked and that the services rendered by the appellant were correctly classified under "Air Travel Agent" services, thus not attracting additional service tax under "Business Support Services". The Tribunal also noted that there was no need to address the issues of interest or penalty due to the decision on merits and limitation.
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