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TMI Blog2014 (6) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant s client the airlines. It is not disputed that in respect of cancelled tickets, the airlines do not give any commission whatsoever to the appellant. In view of this, we hold that no service tax would be payable under Section 65 (105) (l) of the Finance Act, 1994 on the cancellation charges which are a part of the airfare received by the appellant from the persons booking the air ticket who, subsequently, had cancelled the same. Moreover in any case, in terms of exemption Notification No. 22/97-ST dated 26/06/97 the amount received by the air travel agent, which is in excess of the commission received by him from the airline for the booking of passage for travel by air, was exempt from service tax and in terms of this exemptio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e rate prescribed under Rule 6 (7) was the 0.25% of the basic fare in the case of domestic bookings and 0.5% of the basic fare in the case of international bookings. The appellant during the period of dispute had opted to discharge service tax liability under Rule 6 (7) of the Service tax Rules. The first point of dispute is as to whether the service tax paid and collected from the client can be adjusted suo moto for payment of service tax when the air tickets booked had been cancelled and in respect of which he would not get any commission from the airline. The second point of dispute is as to whether the amount charged by the appellant from his customers for arranging visa is taxable as under Business Auxiliary Service. The third point of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tickets the appellant are not receiving any commission from the airlines who are the recipient of their services, no service tax can be charged on the same, that as regards suo moto adjustment of the service tax payment under Rule 6 (7) in respect of certain bookings for air travel on the basic fare basis in cases where the bookings were cancelled, the suo moto adjustment of the service tax paid in such cases of cancelled tickets for discharging service tax liability in respect of other bookings, is permissible in terms of judgment of Hon ble Punjab Haryana High Court in the case of CCE ST, Jalandhar vs. Janta Travels (P) Ltd. reported in 2009 (13) S.T.R. 488 (P H), wherein Hon ble High Court held that such adjustment is permissible, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. As regards the service tax demand on the cancellation charges, these charges are collected from the persons booking the air ticket and this is not the amount received from the appellants client the airlines. It is not disputed that in respect of cancelled tickets, the airlines do not give any commission whatsoever to the appellant. In view of this, we hold that no service tax would be payable under Section 65 (105) (l) of the Finance Act, 1994 on the cancellation charges which are a part of the airfare received by the appellant from the persons booking the air ticket who, subsequently, had cancelled the same. Moreover in any case, in terms of exemption Notification No. 22/97-ST dated 26/06/97 the amount received by the air travel a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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