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TMI Blog2014 (7) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... the authorities below. Extended period of limitation - Held that:- The position regarding the taxable services provided to any person in relation to a tour has already been explained in the year 1997 and in 2001 itself. Therefore, the appellant ought to have given the information about the supplementary services being provided in ST-3 return or otherwise. In any view of the matter, such information without any doubt ought to have been given after 10.9.2004 when the definition of Tour Operator has been amended, but the appellant wilfully failed to disclose such information. Further, appellant has availed the benefit of abatement/exemption under the Notification No. 39/97-ST to the extent of 60% of the total amount charged treating the entire services provided as a package tour, including the facilities such as Air and Railway Tickets, porterage, fooding and lodging, monuments visit services, guide services, and general assistance services etc. This clearly shows that the appellant was fully aware that it is a package tour in which supplementary services are also included, but failed to disclose the receipts towards supplementary service - Decided against the assessee. Suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported in 2006 Vol (8) SCC page-33 the Tribunal was justified in not deciding the argument on merits which were specifically raised by the appellant, as mentioned in grounds no. 2 and 3 and recorded in paragraph 2 of the Tribunal order? (3) Whether Service tax is leviable on payments received by the appellant by way of reimbursement of expenses on actual basis? (4) Whether raising a demand of service tax on amounts received by the appellant from Principal Tour Operator (PTO) as reimbursement of actual expenses, amounts to taxing the same service twice inasmuch as PTO has already paid service tax on gross amount received by PTO on account of package tour, which includes amount of actual reimbursement? (5) Whether with regard to non taxability of reimbursement on actual basis having been decided by co-ordinate Benches of the Tribunal, the Tribunal was justified in taking a different view inspite of the decision of Malabar Management Services (P) Limited Vs. Commissioner of Service Tax, Chennai (2008) 12 VST (CESTAT-Chennai) having been specifically mentioned therein? (6) Whether the notice dated 19.10.2007, issued for the period 01.04.2002 to 31.3.2007 was clearly barre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g such services and the service tax has been paid on such services. However, no evidence has been adduced by the appellant at any stage that on which turnover and how much services tax has been paid by the PTOs. It is the case of the appellant that it was only engaged in the business of providing Transport services to be provided by the tourist vehicle, without any supplementary services, like, Air and Railway Tickets, fooding and lodging, monuments visit services, guide services, porter's services, food services and general assistance service etc. and raised bills from the PTOs only for transport services. The claim of the appellant is that certain amount incurred on behalf of the PTOS for engaging the guides, porters or supplying the foods reimbursement is made on actual basis by the PTOs against the debit note being raised by the appellant. Copies of the contract between the appellant and PTOs have not been filed. The contention of the appellant is that as per the contract, while providing package tour to the foreign tourists by the PTOs, apart from the transport service, various other supplementary services, namely, Air and Railway Tickets, porter, fooding and lodging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lakhs Seventy Thousand Six Hundred Fifty Five only) [Rs.11447261/- of Service Tax + ₹ 123394/- of Educational Cess] should not be demanded and recovered from them under the provisions of Section 73(1) of the Act read with Section 68 of the Act ibid and Rule 6 of the Service Tax Rules, 1994. Since the party has already deposited ₹ 1500000/- against their service tax liability as discussed above, why the same should not be confirmed and appropriated against them. (ii) Penalty should not be imposed upon them under Section 78 of the Act ibid for suppression of facts and the value of taxable service and for contravention of various provisions of the Act and the Rules made thereunder with intent to evade payment of Service Tax. (iii) Penalty should not be imposed upon them under Section 76 of the Act ibid for failure to pay Service Tax in accordance with the provisions of Section 68 of the Act and Rule 6 of the Service Tax Rules, 1994. (iv) Interest at the appropriate rate for the relevant period till the payment of the Service Tax should not be demanded and recovered from them under the provisions of Section 75 of the Act. The appellant filed a detailed reply to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the service tax and the penalty, in view of the fact that the Tribunal has held that a sum of ₹ 60,26,124/= and ₹ 42, 24, 160/=, aggregating to ₹ 1,02,50,334/= would not be liable for service tax. The order of the Tribunal is impugned in the present petition. It also appears that the appellant subsequently filed a recalling application on 30th October, 2008 on the ground that some of the pleas, which have been taken in the appeal and the arguments raised in respect thereof during the course of the hearing have not been adjudicated. The said application is Annexure-8 to the memorandum of appeal. It is being informed by Sri Bharat Ji Agrawal, learned Senior Counsel, appearing on behalf of the appellant, that the said recalling application has been rejected by the Tribunal. The order of the Tribunal is Annexure- We have heard Sri Bharat Ji Agrawal, learned Senior Advocate, counsel for the appellant and Sri Ashok Singh, learned Senior Standing Counsel, Union of India, appearing on behalf of the respondents. Learned Senior Counsel, appearing on behalf of the appellant, made following submissions: (i) The appellant acted as an agent of the Principal Tour O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. At the most, the demand can be raised for the period of one year from the date of issuance of the show cause notice. (iii) He next submitted that prior to 10th September, 2004, in the definition of 'tour operator' provided in clause (115) of Section 65, the supplementary services, namely, 'planning', 'scheduling', 'organising' or 'arranging tours', which may include the arrangement for accommodation, 'site seeing' or other similar services, 'by any mode of transport', was not included. These services have been added by the Finance (No.2) Act, 2004, vide Circular dated 10th September, 2004, therefore the amount received towards the supplementary services, prior to 10th September, 2004, cannot be included in the gross turnover and cannot be subjected to service tax. (iv) He also submitted that the Circular dated 23rd August, 2007 is not applicable to the disputed period as it has been issued subsequent to the relevant period and is applicable prospectively. Further, the Circular cannot create the tax liability and the Commissioner, Central Excise as well as the Tribunal cannot place reliance on the Circular dated 23rd A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llant to raise such dispute and these questions cannot be said to be substantial questions of law. He further submitted that the appellant failed to establish that on the entire gross turn-over of the package tour, which has been received by the PTOs from their customers, which also includes the payment made by the PTOs to the appellant, service tax has been paid by them. There is nothing on record to establish that on the amount paid by the PTOs, the service tax on the amount of transportation charges has been paid by the PTOs inasmuch as the appellant itself admitted the liability of service tax on the amount of transportation charges and paid the service tax. The submission is that the appellant failed to prove that on the amount paid by the PTOs to the appellant towards supplementary services, service tax has been paid. No evidence has been adduced in this regard. It is the submission of learned Senior Standing Counsel that the appellant has treated the entire tour contract as a tour package and, accordingly, claimed the benefit of abatement/exemption, under the Notification No. 39/97-ST to the extent of 60% of the total receipt. This clearly shows that the appellant was ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to a tour and includes the charges for any accommodation, food or any other facilities provided in relation to such tour. Further, a Circular has been issued in 2001, which is referred in the order of the Tribunal itself, wherein same clarification has been reiterated. In pursuance of the said Circular, various trade notices have been issued by the respective Commissioners. Therefore, though the appellant was fully aware about said Circulars that he was liable for the service tax on the entire gross amount, which includes, the amount received towards rendering supplementary services, yet has wilfully failed to disclose such details in the return and has wilfully made suppression and mis-statement. He submitted that so far as the penalty is concerned, since it is a clearcut case of suppression and mis-statement, therefore, penalty has rightly been levied, under Sections 76 and 78. Reliance is being placed on the decision of the Apex Court in the case of Tamilnadu Kalyan Mandapam Assn. v. Union of Inida, reported in 2006(3) STR 260 (SC). We have considered rival submissions perused the material on record. It would be appropriate to refer the relevant provisions of the Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ........................... (d)................................................. (e)................................................ (f)................................................ (g).............................................. [but does not include- (i) initial deposit made by the subscriber at the time of application for telephone connection or pager or facsimile (FAX) or telegraph or telex or for leased circuit; (ii) the cost of unexposed photography film, unrecorded magnetic tape or such other storage devices, if any, sold to the client during the course of providing the service; (iii) the cost of parts or accessories, or consumable such as lubricants and coolants, if any, sold to the customer during the course of service or repair of motor cars, light motor vehicle or two wheeled motor vehicles; (iv) the airfare collected by air travel agent in respect of service provided by him; (v)the rail fare collected by the rail travel agent in respect of service provided by him; (vi)the cost of parts or other material, if any, sold to the customer during the course of providing maintenance or repair service; (vii)the cost of parts or other mate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the Central Excise Officer of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid : Provided that the Central Excise Officer may determine the amount of short payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner specified in this section, and the period of one year referred to in sub-section (1) shall be counted from the date of receipt of such information of payment. Explanation. --(1) For the removal of doubts, it is hereby declared that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... continues, so, however, that the penalty under this clause shall not exceed the amount of service tax that he failed to pay. 78. Penalty for suppressing value of taxable service. Prior to 10.09.2004 (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, by reason of- (a) fraud; or (b) collusion; or (c) wilful mis-statement; or (d) suppression of facts; or (e) contravention of any of the provisions of this Chapter or of the rules made thereunder with the intent to evade payment of service tax, the person, liable to pay such service tax or erroneous refund, as determined under sub-section (2) of section 73, shall also be liable to pay a penalty, in addition to such service tax and interest thereon, if any, payable by him, which shall not less than, but which shall exceed twice, the amount of service tax so not levied or paid or short-levied or short-paid or erroneously refunded. ........ ................. .............. After 10.09.2004 If the [Assistant Commissioner of Central Excise or, as the case may be, Deputy Commissioner of Central Excise] in the course of any proceedings under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be accepted for the reasons: (1) that the appellant has filed a miscellaneous application on the ground that the issue has not been considered by the Tribunal, the same has been rejected by the Tribunal against which no appeal has been filed; and (2) the appellant is not able to adduce any evidence in the form of assessment order of the Principal Tour Operator or any other documents issued by the service tax authorities to substantiate the claim that service tax has been paid on the entire amount by the Principal Tour Operator, which includes the amount paid to the appellant. Merely on the basis of the certificates issued by the Principal Tour Operator enclosed with the memorandum of appeal, the claim of the appellant cannot be accepted inasmuch as it is doubtful whether these certificates have been filed before the authorities below. Now coming to the question whether the proviso to Section 73 (1) of the Act is applicable or not. It is the case of the Department that the appellant has only disclosed the amount received towards transportation in ST-3 return and paid the service tax on the amount received. Supplementary services for arranging Air and Railway Tickets, foo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Central Excise, Raipur, reported in 2013 STPL 69 SC is not applicable. However, as referred above, in the present case, on the facts it has been established that there was a clear case of wilful mis-statement of fact. We do not find substance in the argument of learned counsel for the appellant that prior to 10.9.2004, supplementary services were not included in the definition of Tour Operator and, thus, prior to 10.9.2004, there was no suppression of fact, in not giving the information about rendering the supplementary services and about the amount received towards such supplementary services from the Principal Tour Operator, therefore, notice as well as the demand for the prior to 10.9.2004 are liable to be set aside. This argument of learned counsel for the appellant is not acceptable. Clause (n) of Sub-section (105) of Section 65 provides that taxable service means any service provided or to be provided to any person by a tour operator in relation to a tour. Sub-section (115) defines 'tour operator' which means any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act or Rules ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... widest amplitude and content and include even questions as to the exist-ence, validity and effect (scope) of the arbitration agreement. In the case of Mansukhlal Dhanraj Jain and others vs. Eknath Vithal Ogale Etc, reported in 1995 (2) SCC-665, the Apex Court held has follows: The expression in relation to (so also pertaining to ), is a very board expression which presupposes another subject matter. These are words of comprehensiveness which might have both a direct significance as well as an indirect significance depending on the context, see State Wakf Board v. Abdul Azeez, following and approving Nitai Charan Bagchi v. Suresh Chandra Paul, Shyam Lal v. M. Shyamlal and 76 Corpus Juris Secundum 621. Assuming that the investments in shares and in lands do not form part of the undertaking but are different subject matters, even then these would be brought within the purview of the vesting by reason of the above expressions. In this connection reference may be made to 76 Corpus Juris Secundum at pages 620 and 621 where it is stated that the terms 'relate is also defined as meaning to bring into association or connection with. It has been clearly mentioned that relat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received towards supplementary services claimed to have been received by way of reimbursement, on actual basis, are liable to service tax. Section 65 (105)(n) defines 'taxable service' means any service provided to any person by a tour operator in relation to a tour. Thus, it includes any and all services provided by the Tour Operator in relation to a tour, namely, porterage services, monuments visit services, guide services, food services and general assistance services etc. for which the amount has been paid. The words 'in relation to a tour' is a wide and includes all sort of services, which relate to tour. It may also includes supplementary services, apart from the transport services, provided by the Tour Operator. The Tour Operator is defined under Sub-section (115) of Section 65. Sub-section (115) defines 'tour operator' engaged in the business of operating tour in a tourist vehicle, read with in relation to a tour means carrying on the business of operating tour which includes transportation services and other allied supplementary services connecting with the tour. There is nothing in the definition which excludes supplementary services which are co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Central Excise Appeal No. 67 of 2014, M/S Daurala Organics Vs. Commissioner of Central Excise, decided on 1.4.2014. The Division Bench of this Court has held as follows: Section 80 of the Finance Act, 1994 contains a non-obstante provision which begins with the words 'notwithstanding anything contained in the provisions of section 76, section 77 or section 78'. Under section 80, the burden is cast upon the assessee of proving that there was reasonable cause for the failure referred to in sections 76, 77 or 78, in which event no penalty would be imposable for the failure. The important point to note is that while enacting section 80, Parliament introduced an overriding non-obstante provision which operates even in relation to the provisions of section 78. Consequently, the provision envisages that notwithstanding what is contained in section 78, it is open to an assessee to prove that there was a reasonable cause for the failure attributed in section 78. The view which has found acceptance by the Tribunal in the present case is that once the extended period of limitation under section 73(1) has been applied, there can be no reasonable cause within the meaning of s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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