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TMI Blog2023 (11) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on the air fare plus fuel surcharge cannot, therefore, be sustained and is set aside. Extended period of limitation - HELD THAT:- It would not be necessary to examine whether the extended period of limitation was correctly invoked by the Commissioner. The order dated 30.01.2017 passed by the Commissioner cannot be sustained - Appeal allowed. - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT And HON BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Ms. Madhumita Singh and Shri Sameer Sood, advocates for the Appellant Dr. Radhe Tallo, Authorized Representative for the Respondent ORDER JUSTICE DILIP GUPTA : Kafila Hospitality Travels Pvt. Ltd. the appellant , an approved International Air Ticketing Association . IATA agent registered with the Service Tax Commissionerate, Delhi under the category of air travel agent service , has filed this appeal to assail the order dated 30.01.2017 passed by the Commissioner of Service Tax, Delhi-I the Commissioner . The order confirms the proposed demand of service tax under rule 6(7) of the Service Tax Rules, 1994 1994 Rules by adding the amount of fuel surcharge to the air fare for the purpose of dete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A containing the ticket wise detail information i.e., Airline Code, purchased through cash or credit, basic fare, fuel surcharge YQ taxes, other charges charged by the airlines, rate of commission, commission paid, TDS, amount adjusted against advance paid to airlines and the balance amount receivable and pointed out that commission was paid on the fare alone and not after fuel surcharge to the fare. The appellant also pointed out that it had no contract with the airlines and all the transactions, even with the Global Distribution System, were taking place through IATA. The appellant also pointed out that the format of BSP Statement is followed uniformly all over the world and the appellant cannot influence IATA. 6. However, a show cause notice dated 05.07.2012 was issued to the appellant proposing demand of service tax under the following heads: (i) Non-payment of service tax in terms of rule 6(7) of the 1994 Rules on gross value on which commission is paid by airlines; and (ii) Inadmissible CENVAT credit availed on the input service invoices against unregistered premises. 7. The appellant filed a reply to the show cause notice and denied the allegations. 8. Howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng commission on the amount of the fare only and I reject the same accordingly. xxxxxxxxxxxxx 17.6. I find that in the instant case the proposal for denial of cenvat credit has been made on the sole ground that the relevant invoices contain address of the assessee s Mumbai office and that the said address has not been intimated to the Department for incorporation in their ST-2registration certificate. Therefore, I observe that the said documents on which credit has been availed is not in dispute except the issue of the address. I further observe that there is no dispute regarding rest of the entries of the invoice and specifically on the issue that the goods or services covered by the said documents have been received and accounted for in the books of account of the receiver i.e. the assessee. In view of these facts and the aforesaid statutory provisions of the cenvat law, the assessee is duly entitled for the benefits of proviso of Rule 9(2) of the Cenvat Credit Rules, 2004 in the instant case and so the demand of Rs. 140735/- on this account raised through instant SCN is not sustainable and merits to be dropped and I hold it accordingly. (emphasis supplied) 9. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of Section 6 (7) is as to on which part of the airfare, the commission was being normally paid by the Airlines to the Air Travel Agent's. According to the appellant, they have evidence to prove that they have discharged the service tax liability under Rule 6(7) only on that part of the fare on which the commission was being paid, but this plea has not been considered by the Commissioner. In view of this, the impugned order is set aside and the matter is remanded to the Commissioner for de novo decision after considering the Appellant s plea and also our observations in this order. Misc. application for additional evidence is also allowed. In course of de novo proceedings, the Commissioner shall consider the documents produced by the appellant in support of their plea that they have paid service tax on that part of the airfare on which the commission is normally paid by the Airlines. The appeal, stay application as well as misc. application stand disposed of as above. (emphasis supplied) 10. The matter was, thereafter again heard by the Commissioner and by an order dated 30.01.2017 the demand was confirmed after invoking the extended period of limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rate Amount (Received) % 1. 90 4797032616 23.07.09 50 2050 128 64 3 2. 16 to 31 90 4797032624 23.07.09 1050 2100 9.05 95 * 3. 1436467 90 4797032630 23.07.09 200 3100 49.5 99 * -090702 July‟ 09 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1436497 58 3605022886 13.07.09 1265 2350 8.62 109 * -090701 July‟09 14. 58 3605022887 13.07.09 1595 5450 13.29 212 * 15. 90 3605022888 13.07.09 150 2350 50.67 76 * 16. 58 3605022922 14.07.09 315 2350 25.4 80 * 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount is calculated on the basis of Basic fare and fuel surcharge reflected in the individual ticket particulars. In a normal trade practice, the amount of commission is generally a fixed percentage and cannot vary from 3% to 788.89% during the course of fortnight and that too for the same Airline as being reflected in the IATA BSP statement of tickets tabulated above. This factual position on the basis of evidence on record leads me to the conclusion that the airlines were indeed paying commission to the Air Travel Agent(s) on the amount collected and shown as basic fare as well as fuel surcharge and therefore the contention of the assessee that they were receiving commission only on the basic fare for the purpose of calculation of taxable values under Rule 6(7) of the Service Tax Rules does not seem to be correct and I reject the same. 4.9 I find that the assessee has not provided year-wise details of the basic fare as well as fuel surcharge for the purpose of calculation of their service tax liability under Rule 6(7) of the Service Tax Rules, 1994. As discussed supra, I find that the noticee while paying Service Tax under the provisions of Rule 6(7) of the Rules ibid, did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entative appearing for the department, however, supported the impugned order. 13. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered. 14. In order to appreciate the issue involved, it will be appropriate to reproduce rule 6(7) of the 1994 Rules as it stood at the relevant time and it is as follows: Rule 6(7) The person liable for paying the service tax in relation to the services of booking of tickets for travel by air provided by an air travel agent, shall have the option, to pay an amount calculated at the rate of 0.6% of the basic fare in the case of domestic bookings, and at the rate of 1.2% of the basic fare in the case of international bookings of passage for travel by air, during any calendar month or quarter, as the case may be, towards the discharge of his service tax liability instead of paying service tax at the rate specified in section 66B of Chapter V of the Act and the option, once exercised, shall apply uniformly in respect of all the bookings of passage for travel by air made by him and shall not be changed during a financial year under any circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the same airline, but when the fuel surcharge was added to the air fare for calculating the commission, there was a fixed trend of rate of commission at the rate of 3 percent. The Commissioner, therefore, concluded that the airlines were paying commission to the air travel agents on the amount collected and shown as air fare and fuel surcharge and the contention of the appellant that it received commission only on the air fare for the purpose of calculating the service tax payable under rule 6(7) of the 1994 Rules was not correct. 18. The aforesaid finding of the Commissioner is based on the premise that the rate of commission paid by the airlines to the air travel agents is uniform and cannot vary. This finding is apparently not based on any evidence available on the record for even the department had not led any evidence to substantiate this finding of the Commissioner. Infact, the department had not led any evidence to even substantiate its claim that some of the airlines were adding fuel surcharge to the air fare for the purpose of payment of commission. 19. Some of the figures from the chart contained in paragraph 4.8 of the order passed by the Commissioner need to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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