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TMI Blog2015 (1) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... onal booking. The word, ‘basic fare’ is defined in the sub-rule as the part of the airfare on which the commission is normally paid to the Air Travel Agent by the Airlines. The explanation to Rule 6(7) defining the term ‘basic fare’ clearly indicates that the basic fare for the purpose of this sub-rule is not the gross fare but is the part of the gross airfare charged from the passengers on which the Airlines normally pay commission to the Air Travel Agent. The expression ‘air fare on which the commission is normally paid’ means the portion of air fare, whether 100% or a lesser percentage; on which most of the Airlines pay the commission ignoring the stray cases in which commission is paid on a different part of air fare. The appellant s pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 14-10-2014 - Smt. Archana Wadhwa and Shri Rakesh Kumar, JJ. For the Appellant : Shri N. Venkataraman, Sr. Advocate and Shri Anil Sood, Advocate and Ms. Rajeshwari K.G., Advocate For the Respondent : Shri Amresh Jain, DR JUDGEMENT Per Rakesh Kumar The facts leading to filing of this appeal along with stay application and misc. Application for admission of additional documents are, in brief, as under:- 1.1. The appellant is an approved agent of International Air Ticketing Association (IATA)) and Service Tax Registration No. AAA CD385 3FST001 with the Service Tax Commissionerate, Delhi under the category of Air Travel Agent Service. He is engaged in providing air tickets to the clients both as an IATA agent an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that during the above mentioned period, the Appellant had taken the cenvat credit of ₹ 1,40,375/- on the basis of the invoices issued to their Bombay office while the Bombay office was not mentioned in the central excise registration obtained by him and the department was of the view that this amount of the cenvat credit would not be admissible to him. 1.2. It is in view of the above facts that the show cause notice dated 5.7.2012 was issued to them for - (a) recovery of service tax of ₹ 3,54,81,558/-under proviso to Section 73(1) of the Finance Act, 1994 along with interest thereon under Section 75 ibid; (b) recovery of cenvat credit amounting to ₹ 1,40,735/- under Rule 14 of the Cenvat Credit Rules, 2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax liability in terms of Rule 6(7) of the Service Tax Rules, 1994, that in terms of this sub-rule, the person liable for paying service tax on the services provided as Air Travel Agent shall have option to pay tax at the rate of 0.6% of the basic fare in case of domestic booking and at the rate of 1.2% of the basic fare in case of international booking, that in terms of explanation to this sub-rule, the expression basic fare is the part of the fare on which commission is normally paid to the Air Travel Agent by the Airlines, that from the explanation, it is very clear that the service tax at the rate specified in sub-rule is not chargeable on the gross basic fare but is chargeable only on that part of the basic fare, on which the commissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erating the findings of the Commissioner in the impugned order and emphasized that the Audit Team as well as the departmental officers had repeatedly asked the appellant to give the break-up of the gross fare into the basic fare and fuel surcharge but since this information was not provided, the department has no option but to determine the Appellant service tax liability on the basis of the gross commission. He emphasized that the appellant while opting to discharge service tax liability under Rule 6(7) of the Service Tax Rules has not paid service tax, on the portion of the airfare on which the commission was being received by them, as if this had been done, there would not have been such a big difference between the service tax liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Airlines pay commission only on that portion of fare. In other words, the Appellant plea is that they have paid service tax on the basic fare as defined in the sub-rule. The departments contention, however, is that since the Appellant have not given the break-up of the gross fare into basic fare and the fuel surcharge to enable the department to determine the basic fare component, for the purpose of Rule 6(7), they would not be eligible for the facility of discharge of service tax under Rule 6(7) of the Service Tax Rules and accordingly, the department has determined the service tax liability on the basis of the gross commission. In our view, the term basic fare , in terms of its definition in Rule 6(7), is not the gross fare includin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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