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TMI Blog2017 (4) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... gents as consideration for service rendered by assessee. Cum-tax valuation - target incentive - Held that: - As the amount is not evidenced as receipts for services but is merely deemed to be so, it is plain that tax has not been collected on this amount. Moreover the amount paid by the airline is a consequence of contractual terms which does not admit to additional payment of tax on the contracted amount. In accordance with principles of equity, the amount on which tax has been collected should be considered as including the tax component. Likewise, the commission received as General Sales Agent on cargo bookings effected by IATA agents is covered by contractual agreement which, too, does not provide for tax liability on the amount p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of business auxiliary service that was short-paid for the period from 1st July, 2003 to 10th May, 2007 for sale of tickets directly to passengers and ₹ 7,13,577 short-paid in relation to commission on cargo booked by IATA agents. Interest on delayed payments and penalties under Sections 76, 77 and 78 of Finance Act, 1994 were imposed in the first notice and interest on delayed payments and penalties under Sections 76 and 77 of Finance Act, 1994 in the second notice. 2. Assessee contends that the tax of ₹ 3,79,461 demanded on commission received for transmission to IATA agents but retained had been remitted on 18th October, 2011 along with interest of Rs. 2,08,685/- and reduced penalties and that, of the Rs. 7,11,577/- c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue would be tenable if some service was rendered by IATA agents to the assessee for which the consideration was a portion of the incentive received from M/s. Saudi Airlines. In the absence of such a service, it would not fit into the definition of taxable service among those enumerated in Section 65(105) of Finance Act, 1994. 6. It is also seen that the grounds of appeal presented by Revenue also do not adduce the nature of service that involves IATA agent and Saudi Airlines. The impugned order appears to hold that the unclaimed amount is commission received as General Sales Agent and liable to tax. In these circumstances, expression gross amount charged in Section 67 of Finance Act, 1994 is limited to the consideration taxed in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tating a separate payment by them on 18th October, 2011 which should be refunded to them. 9. On the claim of valuation of taxable services as cum-tax , we take note of the nature of transactions on which tax has been demanded in the impugned order. It has been held supra that tax liability does not arise on commission transmitted by M/s. Saudi Airlines through assessee to IATA agents and it is admitted in the impugned order that tax is limited to the extent retained by the assessee without transmission. Though the assessee did explain that this amount has been retained on behalf of the airline, adjudicating authority has deemed this to be receipts for rendering business auxiliary service and assessee does not contest the finding excep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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