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TMI Blog2013 (11) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... ty to pass a denovo order within a period of three months from the date of communication of this order. - matter remanded back - ST/411/2012 - A/1718/13/CSTB/C-I - Dated:- 4-7-2013 - P R Chandrasekahran And Anil Choudhary, JJ. For the Appellants : Shri V Sridharan, Sr.Adv. Shri Tarun Govil, Adv. Ms Neha Thakur, Adv. For the Respondent : Shri K Sitawald, Addl. Solicitor General PER : P R Chandrasekharan The appeal and stay petition arise from Order-in-Original NO.65/STC-I/SKS/11-12 dated 29/2/2012 passed by the Commissioner of Service Tax, Mumbai-I. 2. The appellant, M/s. Mumbai International Airport Pvt. Ltd. (MIAL in short) are a joint venture company undertaking the operations of Mumbai International Airport and are registered with the Department for Service Tax purpose under various categories of taxable services. The appellant was collecting Development Fee (DF in short) from the every departing passenger in the airport in terms of Section22A of the Airport Authority of India Act,1994 (AAI Act in short). The first such levy of DF was authorized by the Government of India w.e.f. 1.4.2009 and the Ministry of Civil Aviation vide letter dated 27.2.2009 had co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions:- (i) In the case of Consumer Online Foundation Vs. Union of India (2011) 5 SCC 360, the appellant was one of the respondent and it was held by the Hon'ble Apex Court that DF' is not in the nature of charges for consideration for service provided, but is in the nature of a Cess or Tax for generating revenue for specific purposes as mentioned under Section22A of the AAI Act, 1994. Merely because DF' is charged from the passenger access as a component of the ticket issued by the Airlines, it does not mean that such levy is in lieu of granting the passenger access to the airport to reach the plane. Therefore, linking payment of DF to grant of access to the airports is not sustainable in law, especially when the Apex Court has held that levy under Section 22A of AAI Act is not charges or consideration for the facility provided by the Airport Authority. The Hon'ble Apex Court in the said case also held that levy under Section 22A of the AAI Act, though described as fee, is really in the nature of cess or tax for generating revenue for the purposes specified under Section 22A of the said Act and, therefore, no Service Tax is payable on such collection of tax. (ii) In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the category of exempted supplies. However, in the present case, under the Finance Act, 1994, only those services are chargeable to Service Tax, which are specified and defined under the various sub-clauses of Clause 105 of Section 65. In the light of the above, it is submitted that the demand of Service Tax on the appellant is unsustainable in law and, therefore, the same is liable to be set aside. 4. The learned Addl. Solicitor General of India appearing on behalf of the Revenue made the following submissions:- (i) As per the provisions of Section 22A of the AAI Act, 1994, levy and collection of DF is allowed for funding and financing the cost of up-gradation, expansion or development of the airport at which the fee is collected and establishment or development of a new airport in lieu of the airport at which fee is collected. MIAL has collected about Rs. 530 crores during April, 2009 to January, 2011 by way of DF and the same has been deposited in a separate escrow account and the Airport Authority of India and the Central Government has supervisory powers in respect of the said escrow account to ensure that money is spent only for the specified purposes. MIAL has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent fee, a person cannot enter the airport and, therefore, any payment made for gaining access to the airport and to reach the plane has a clear nexus between the amount charged by the MIAL and amount paid by the passenger. (v) As regards the reliance placed by the appellant on the Cochin International Airport Ltd. (supra) case, the facts are different. In the said case, it was held that the User Fee collected from the international passenger was not for any services rendered, but only to augment financial situation of the appellant and hence, Service Tax was not payable. However, situation in the present case is different. The DF has been collected for the purpose of development and modernization of airport, which is one of the services required to be provided by the Airport Authority of India under Seciton12 of the AAI Act, 1994. In the Consumer Online Foundation case relied upon by the appellant, the Hon'ble Apex Court held that DF was not a legally collected tax inasmuch as rules were not made for the collection of the same and, therefore, the levy and collection of DF was ultra vires of the AAI Act, 1994. Inasmuch as the DF is not a legally collected tax, it loses the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 22 and the development fees levied and collected under Section 22A of the 1944 Act. The charges, fees and rent collected by the Airports Authority under Section 22 are for the services and facilities provided by the Airports Authority to the airlines, passengers, visitors and traders doing business at the airport. Therefore, when the Airports Authority makes a lease of the premises of an airport (including buildings and structures thereon and appertaining thereto) in favour of a lessee to carry out some of its functions under Section 12, the lesse who has been assigned such functions, will have the powers of the Airports Authority under Section 22 of the Act to collect charges, fees or rent from the third parties for the different facilities and services provided to them in terms of the lease agreement. The legal basis of such charges, fees or rent enumerated in Section 22 of the 2008 Act is the contract between the Airports Authority or the lesse to whom the airport has been leased out and the third party, such as the airlines, passengers, visitors and traders doing business at the airport. But there can be no such contractual relationship between the passengers emba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any services rendered to the outgoing international passengers and, therefore, no Service Tax is leviable on the User fee collected under the category of Airport Service'. The said decision of the Hon'ble High Court was also affirmed by the Hon'ble Apex Court in the same case reported in 2010 (17) STR A79 (SC). From this decision, what emerges is that the charges collected either by way of DF or by way of User Fee is not in respect of any particular service rendered by the Airport Authority. If that be so, we do not understand how in the present case, the Revenue can argue that the DF collected is for the services rendered by the appellant to the passengers boarding the flight from the Mumbai International Airport. In the Consumer Online Foundation case (supra), the Hon'ble Apex Court directed that since it is difficult to locate and identify from the embarking passenger from whom Development Fees have been collected, the Airport Authority at these places were allowed to retain the DF levied and collected and to utilize the same for the specific purpose mentioned under Section 22A of the AAI Act, 1994 and to account for the same to Airport Authority of India. 5.3 Section22A g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the impugned period, these activities were specifically excluded from the purview of Service Tax levy both under commercial or industrial construction services as defined under Section 65 (25b) and also under Works Contract Service as defined under Section 65(105) (zzzza). If that be so, we do not understand how Service Tax can be levied on this activity in the guise of providing access to passengers to the airport, so as to enable them to board the aircraft'. In other words, the Revenue is trying to levy Service Tax indirectly what has been specifically excluded under the Construction Service and Works Contract Service. 5.5 A similar issue arose before the Constitutional Bench of the Hon'ble Apex Court in the case of Commissioner of Central Excise, Pondicherry Vs. Acer India Ltd.- 2004 (172) ELT 289 (SC) and it was held that when goods cannot be taxed directly, it cannot be permitted to be taxed indirectly. Though this decision pertain to excise duty on computer software, the ratio of this decision applies equally well in respect of Service Tax also. In a service tax matter relating to technical testing and analysis services in the case of Commissioner of Central Excise vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35 (SC) also observed that- 13. Circumstantial flexibility, one additional or different fact may make a world of difference between conclusions in two cases. Disposal of cases by blindly placing reliance on a decision is not proper. 14. The following words of Lord Denning in the matter of applying precedents have become locus classicus : Each case depends on its own facts and a close similarity between one case and another is not enough because even a single significant detail may alter the entire aspect, in deciding such cases, one should avoid the temptation to decide cases (as said by Cordozo) by matching the colour of one case against the colour of another. To decide therefore, on which side of the line a case falls, the broad resemblance to another case is not at all decisive.'' **** **** **** **** Precedent should be followed only so far as it marks the path of justice, but you must cut the dead wood and trim off the side branches else you will find yourself lost in thickets and branches. My plea is to keep the path to justice clear of obstructions which could impede it." 5.8 Service tax in India prior to 2012 was selective in scope of levy and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he cost of the ticket by the Airlines. When a ticket is issued to a passenger, it pre-supposes access to the aeroplane, where the access is provided by an Airline or by any other agency. Otherwise, the issue of a ticket becomes meaningless. It is like asking a passenger who has a ticket to travel by train/bus to take platform/entry ticket so that he can board the train/bus. If that be so, the consideration received for travel by air becomes taxable under the category of Air Transport service to passengers of domestic or international air journey, which came under the tax net for international travel w.e.f. 1.5.2006 other than economy travel and in respect of all domestic and international journey w.e.f. 1.7.2010. If that be so, the said activity could not have been taxed under the Airport Service' at all. 5.10 A similar issue came up for consideration as to whether Service Tax is leviable on the Toll or User Charges or Access Fee paid by the road users. The CBE C vide Circular NO. 152/3/2012-Service Tax dated 22.2.2012 clarified that Service Tax is not leviable on Toll paid by the users of roads and the said Circular is reproduced below:- Subject : Toll in the nature of 'user ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded for the purpose of levy of Service Tax. Circular No. 89/2006 dated 18-12-2006 issued from File No. 255/1/2006-CX-4 refers. If that be so, if DF is in the nature of a cess or a tax, the question of levying Service Tax thereon would not arise at all. 6. In the impugned order, we find that none of these issues, germane to the exigibility to service tax has been considered by the adjudicating authority at all. Therefore, the matter needs fresh consideration. Accordingly, we remand the matter back to the adjudicating authority for de novo consideration of the various issues involved as discussed above, taking into account, inter alia, the decisions of the Hon'ble Apex Court in the case of Consumer Online Foundation, Cochin International Airport Ltd., Acer India Ltd., Orissa Cement Ltd. and the various instructions issued by the CBE C (cited supra) and thereafter, pass a fresh order after granting the appellant a reasonable opportunity of being heard. The appellant is also directed to co-operate with the department and make their submissions without resorting to any dilatory tactics. Since the revenue involved is significant, we direct the adjudicating authority to pass a denovo or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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