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TMI Blog2024 (7) TMI 1115X X X X Extracts X X X X X X X X Extracts X X X X ..... vice , which is admittedly not being carried out by the Appellant as a service provider, since conducting tour by tourist vehicle having permit is a condition precedent to include arrangement for accommodation and not such arrangement of accommodation would alone put the service in the category of tour operator service and therefore, SCN justifying activity of the Appellant falling under the category of tour operator service only because the word accommodation is used in the definition, is a mere allegation and substantiation of the same by the Commissioner is erroneous as not in conformity to the statutory provisions. Leviability of Service Tax on the alleged service of providing hotel accommodation by the Appellant - HELD THAT:- It is noticed that learned Commissioner had avoided to give his finding on this specific issue by taking the classification to tour operator in which, hotel room accommodation was stated to be a composite service activity despite the fact that in the reply to the SCN, specific averment regarding non-taxability of hotel room accommodation before dated 01.05.2011 was made in para 3 of the said reply. We are in incomplete agreement to the fact that hotel roo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e this forum by the Assessee-Appellant. 2. Fact of the case, in a nutshell, is that Appellant had registered itself for providing various services including Travel Agent, Advertising Agency Services, Rent-a-Cab Operator Services, Business Auxiliary Services etc. On receipt of credible information by the DGCEI that Appellant was not appropriately discharging its Service Tax liability, search was conducted in the address of Appellant at Link Road, Mallad West, Mumbai on 14.01.2009, relevant records were obtained, further investigations were carried out, officials of Appellant company tendered their statements and it was ultimately noticed that Appellant had discharged its Service Tax liability under one Heading Travel Agent and not in respect of other services, for which it had registered itself. It was also brought out during investigation that Appellant was engaged in booking accommodation for Customers through its website travelguru.com in which every detail of availability of hotels in cities, its tariff, amenities, etc. were available enabling customers to choose the hotel on their own and making reservation through online transactions and by virtue of agreement with various hot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was collected by the Appellant from the customer was passed on to the hotel after deduction of the commission receivable from hotel by the Appellant against which Service Tax was discharged. 3.2 On classification of service, he further argued that learned Commissioner had arrived at an erroneous conclusion that Appellant had been providing Tour Operator Service to the customers and the classification of service provided by it as travel agent was not correct for which the manner of discharging Service Tax liability was unacceptable as it is based on a wrong premises without proper interpretation of the provision of law vis. a. vis. definition of Tour Operator Service as available under Section 65(115) of the Finance Act, 1994 wherein arrangement of accommodation was not a standalone service as being made part of the business of planning, scheduling, organising or arranging tours in a tourist vehicle or through any mode of transport and therefore, operating tours in tourist vehicle is a condition precedent to providing accommodation, which is not the situation in the present case. In drawing our attention to the sample invoices enclosed in page 134 and 146 of the appeal memo, he wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also led his argument on two more vital issues - namely, double taxation and invocation of extended period. Drawing our attention to para 21 of the Order-in-Original (page 105 of the appeal memo) he submitted that while acknowledging payment of Service Tax of ₹3,33,45,046/- by the Appellant for the said period, learned Commissioner had confirmed the entire amount proposed in the demand-cum SCN after holding that no legal provision exist whereby set off of Service Tax could be made in respect of Service Tax receipt and Service Tax confirmed, which is contrary to the very conception of taxation statute which no law of the land would approve of and the very element of double taxation even of a small fraction has made his order unsustainable. 3.5.1 Secondly, on the point of a demand raised for the extended period, he restricts his argument to the fact that there were at least 13 communications made by the DGCEI as well as Respondent-Department between 05.10.2006 and date of issue of show-cause notice i.e. on 18.08.2011 and several documents were being produced before them where-after, satisfactory note by way of reply letter were also received from them and therefore, matter was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears testimony to the fact that Appellant had not filed ST-3 return from April, 2007 to October, 2008 but subsequently filed the same which is manifest in ST-3 return copies available from page 236 to 256 with a noting that filed belatedly and therefore, the contention of Appellant that suppression is not made out is not tenable, for which interference by the Tribunal in the order passed by the Commissioner is uncalled for. 5. We have perused the case record, written note and additional written submissions received from learned Counsel for the Appellant alongwith compilation of case laws. Primarily issue being one of classification of the service, the same is taken up at the first instance for the purpose of discussion and for rendering our finding on it. 6. Para 14 of the show-cause notice (SCN) dated 18.08.2011 reads: Para 14 The notice is restricted to the Service Tax liability of M/s. DVTG [ M/s. DV Travels Guru Pvt. Ltd. ] in respect of service provided by them as tour operator only . (emphasis supplied) It is admitted fact of the parties that Appellant had registered for providing various services. For providing both offline and online services for booking of hotels, it was r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the rules made thereunder. (Underlined to emphasise) Thereafter, definitions of tour operator service had undergone a slight change and w.e.f. 16.05.2008 the provision is as hereunder. Section 65(115) tour operator means any person engaged in the business of planning, scheduling, organising or arranging tours (which may include arrangements for accommodation , sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made thereunder. (Also underlined to emphasise) 8. A Bare reading of the above definitions of tour operator service would go to show that primary engagement or activity or business of a person is that of planning, scheduling, organising or arranging tours by any mode of transport covered by permit granted under the Motor Vehicle Act. 1988 or the rules made there under and in so doing i.e. while conducting tour arrangement, accommodation, if made, can be included within the definition of tour operator service but a stand alone provision for arrangement of accommodation in a hotel room ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice provider, since conducting tour by tourist vehicle having permit is a condition precedent to include arrangement for accommodation and not such arrangement of accommodation would alone put the service in the category of tour operator service and therefore, SCN justifying activity of the Appellant falling under the category of tour operator service only because the word accommodation is used in the definition, is a mere allegation and substantiation of the same by the Commissioner is erroneous as not in conformity to the statutory provisions. On this ground alone Appellant succeeds in its appeal. 9. Next comes leviability of Service Tax on the alleged service of providing hotel accommodation by the Appellant. Consistently Appellant is asserting that it is not providing any hotel accommodation service to the customers of hotel but facilitating reservation of such accommodation in the hotel through its website, which it was doing at the behest of hotels who under contractual obligation accepted such service from the Appellant. Further, contention of the Appellant is that it was collecting money on behalf of the hotel from the customers and passing on the same to the hotel after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onent would amount to double taxation, which no law of the land would approve of and on ₹11,170/- that was admittedly acknowledged by the Taj Hotel to have been realised for room accommodation in their hotel was not taxable during the relevant time as Section 65(105)(zzzzw) was brought into the Service Tax statute by way of amendment to Finance Act made w.e.f. 01.05.2011, making hotel room accommodation liable to Service Tax and the period of dispute ends on March 31, 2011, much before introduction of the said levy and therefore, whether the amount was collected by the Appellant and gone to the hotel or directly paid to the hotel is of no consequence to the Revenue. 10. It is noticed that learned Commissioner had avoided to give his finding on this specific issue by taking the classification to tour operator in which, hotel room accommodation was stated to be a composite service activity despite the fact that in the reply to the SCN, specific averment regarding non-taxability of hotel room accommodation before dated 01.05.2011 was made in para 3 of the said reply. We are in incomplete agreement to the fact that hotel room accommodation has been brought to Service Tax net w.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmissions made by the learned Counsel for the Appellant in the preceding paragraphs. Going by the submissions made in para 11.4 of its written submission filed on 25.04.2024, series of communications were stated to have been made by the DGCEI intelligence and the Respondent-Department with the Appellant in between 05.10.2006 and 21.04.2011 numbering about 13 correspondence and learned Counsel for the Appellant has drawn out attention to some of the letters including the one issued by the Respondent-Department on 26.11.2008 asking for financial accounts like Balance Sheet and Profit Loss Account and the other one issued by the Respondent-Department on 27.03.2008, in which there is a reference of completion of scrutiny of ST-3 Returns of the Appellant that was found to be correct alongwith intimation concerning wrong availment of CENVAT Credit of few amount of ₹46,477/- (page 256 of the appeal paper book). This being the facts and evidence of record, none registration of Appellant s Company initially at the setting up stage and not filing of ST-3 Return in some quarters, which were remediable defects and subsequently remediated by the Appellant would evoke no penalty for suppr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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