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TMI Blog2017 (8) TMI 836X X X X Extracts X X X X X X X X Extracts X X X X ..... thod instead of discharging service tax on the rate applicable for the commission received. There is no procedure contemplated in the provision to intimate the department regarding the option exercised. The main reason for disallowing such option to pay service tax on the basic fare, as revealed from the impugned order, is that the appellant has not intimated the department with regard to the exercise of option. When no procedure is contemplated for such intimation, the option exercised by the appellant which is revealed from the service tax returns filed by them cannot be denied. The conduct of the appellant in filing ST-3 returns by calculating the service tax on the basic fare method in terms of the option available to them under Rule 6( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as passed confirming demand of service tax of ₹ 2,54,770/- and imposing penalty of ₹ 5,500/-. The appellants paid these amounts. In appeal, the same was confirmed vide Order-in-Appeal 30.8.2005. Though department filed appeal before Tribunal against reduced penalty the same was dismissed. 3. The appellant did not discharge service tax for the period October 2003 to September 2005, and alleging that appellants cannot discharge service tax on the basic fare but have to pay on the commission received, show cause notice dated 4.10.2006 was issued. After due process of law, the original authority confirmed the demand of ₹ 24,84,734/- along with interest and imposed equal penalty under Section 78 and penalty under Section 76 be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is made on the basic fare basis and ST3 return also evidences that, it is to be treated as sufficient compliance of having exercised the option. * Once the option is exercised it remains till such time the service provider opts Out of the same. 2.1, b) Factual Position: * ST 3 Return for the period October 2002 to September 2003 was filed working out the service tax liability on basic fare method, thereby exercising option provided under rule 6(7) of the service tax rules 1994. * The same was not accepted by the Department for the reason that such options cannot be exercised retrospectively, meaning that the option had been exercised by the appellant and that this can be considered prospective only. * It can be noted that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T-3 returns even after the first order passed by them and that therefore there is suppression of facts. Without filing returns, the department would not be able to know the facts. He submitted that appellants are liable to discharge service tax on the commission received and as they have not filed any intimation to the department informing the option exercised they are liable to pay service tax on the basis of the commission. The quantification is therefore right and proper. The show cause notice issued invoking extended period is sustainable as well as penalties. 6. Heard both sides. 7. The main ground raised by the learned counsel for the appellant is that the demand raised on the basis of commission is not correct for the reason that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the airline." 8. From the above, it can be seen that there is no procedure contemplated in the provision to intimate the department regarding the option exercised. The main reason for disallowing such option to pay service tax on the basic fare, as revealed from the impugned order, is that the appellant has not intimated the department with regard to the exercise of option. When no procedure is contemplated for such intimation, the option exercised by the appellant which is revealed from the service tax returns filed by them cannot be denied. The conduct of the appellant in filing ST-3 returns by calculating the service tax on the basic fare method in terms of the option available to them under Rule 6(7) is sufficient exercise of option. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and these were within the knowledge of the authorities. Apart from this, we do take note that internal audit was conducted and as per report dated 13.10.2005, the appellants were asked to pay service tax for the period from October 2003 to September 2004 to the tune of ₹ 8,35,876/- which was collected by them on the basis of basic fare. The learned AR has opposed the arguments posed by learned counsel on the ground of limitation and contended that the appellant has not filed ST-3 returns or paid the service tax collected by them. This is countered by the learned counsel for the appellant who has submitted that the department was not accepting the ST-3 returns filed by them on 14.10.2005 contending that the appellant has to pay serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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