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TMI Blog2024 (9) TMI 698X X X X Extracts X X X X X X X X Extracts X X X X ..... the demand has been confirmed under the head Business Auxiliary Service for providing vouchers to the customers of corporate clients on their behalf, but for complying under the said clause, the service provider should render the services to the third party which would ordinarily be rendered by the client i.e. the service provider steps into the shoes of the client; whereas, in the instant case, the corporate clients are engaged in manufacture, sale and trading of goods and not engaged in providing Tour Operator Service i.e. in the business of planning, scheduling, organizing or arranging tours, therefore, it cannot be said that the Appellant is providing Tour Operator Service on behalf of the corporate clients when the corporate clients itself are not Tour Operators. The corporate clients were immune from all costs, actions, claims, suits, proceeding etc and hence, the corporate clients were not responsible for the services provided by the Appellant to the customers. Further, the customers of corporate clients are not bound to avail the benefits under vouchers by virtue of the agreement between the Appellant and the corporate clients. Consensus-ad-idem is required between the Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is engaged in multi-level sales promotion activities and has entered into contracts with various corporate clients whereby it sold vouchers in the form of gift, free holiday and free airline ticket to corporate clients against a consideration. The corporate clients provided these vouchers free of cost to its customers who purchase the goods under various schemes and offers from them. The customers redeem vouchers by directly approaching the Appellant as per terms and conditions of the vouchers. In respect of certain vouchers, the customers also make the payment to the Appellant for confirmation of bookings. As per the agreement between the Appellant and its corporate clients, the Appellant is bound to honour all the requests received from the customers and the Appellant is solely and exclusively liable to provide all the benefits or services to its customers as specified in vouchers. The Appellant has been discharging service tax liability under the head Tour Operator on the consideration received from the corporate clients for sale of vouchers after availing abatement under Notification No. 1/2006-ST dt. 01.03.2006 amended vide Notification No. 38/2007-ST dt. 23.08.2007. Audit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ervices to the clients. Thus, there is absence of principal-agent relationship between the Appellant and its corporate clients. 4.4 She further submits that when there is complete absence of principal-agent relationship between the Appellant and its corporate clients, then the Appellant is not liable to pay service tax under the head Business Auxiliary Service in terms of Section 65(19)(vi) of the Act as the Appellant did not provide services in capacity of an agent. In this regard, she relies on following case-laws: M/s Technoy Motors vs. CCE ST, Jaipur-II [Final Order No. 58778- 58779/2017 dated 8.11.2017 (Tri.- Del.)] Infinium Motors Gujarat Pvt. Ltd. vs. CST, Ahmedabad [Final Order No. 11179/2022 dated 30.9.2022 (Tri.-Ahm.)] 4.5 She also submits that the Appellant is correctly discharging its liability under the head Tour Operator' as per Section 65(115) of the Act for providing free holidays/air tickets and accommodation services to the customers. The customers availed the benefits of vouchers after accepting terms and conditions. Thereafter, the Appellant directly provided the services to customers without any intervention of corporate clients. Therefore, the Appellant is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mier Sales Promotion Pvt. Ltd. vs. Union of India and Ors. [2023 (70) G.ST.L. 345 (Kar.)] where vouchers are held to be neither good nor services. 4.9 She further submits that that the department has not considered the tax and interest amounting to Rs.15,355/- already paid by the Appellant. Also, the Appellant had clarified that the difference of Rs.79,08,539/- in ST-3 returns and the balance sheet of the Appellant is reflecting as the department did not consider the benefit of abatement that the Appellant was entitled to receive on account of booking accommodation. Further, she also submits that cum-tax benefit is also available to the Appellant. 4.10 She further submits that the entire demand is barred by limitation because the impugned demand pertains to period 2005- 2006 to 2007-2008 whereas the show cause notice was issued on 13.04.2011 by invoking the extended period of limitation. She submits that the extended period of limitation cannot be invoked as there was no wilful suppression or mis-representation of any fact in relation to payment of service tax. The Appellant was subjected to audit, however, investigation was not initiated pursuant to the objections raised in the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Appellant is actually providing Business Auxiliary Service to the corporate clients because the Appellant is rendering the services on behalf of the corporate clients and therefore, the consideration received from the corporate clients is liable to be taxed under the head Business Auxiliary Service without the benefit of abatement. He also justifies the invocation of extended period of limitation on the ground that the Appellant never brought on record anything that it is providing the services on behalf of the corporate clients and thus, short payment of duty remained unearthed, if the audit had not detected the evasion of duty. 6. We have considered the submissions made by both the parties and perused of the material on record. We find that the only dispute in the present case is whether the Appellant is providing Tour Operator Service as provided under Section 65(115) of the Act or Business Auxiliary Service as provided under Section 65(19) read with Section 65(105)(zzb) of the Act? Before we proceed to decide this question, it will be appropriated to reproduce the definitions of Tour Operator Service as well as Business Auxiliary Service , which are reproduced herein below: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excisable goods. Section 65(105) taxable service means any [service provided or to be provided (zzb) - to a client, by [any person] in relation to business auxiliary service 7. Further, we find that in the present case, the Appellant has entered into contracts with various corporate clients whereby it sold vouchers in the form of gift, free holiday and free airline ticket to corporate clients against a consideration and on that consideration, it is discharging the service tax liability under the head Tour Operator after availing abatement under Notification No. 1/2006-ST dt. 01.03.2006 amended vide Notification No. 38/2007-ST dt. 23.08.2007. We have perused the agreement between the Appellant and its corporate clients and it is clearly provided in clause 6 of the said agreement that the relationship between the parties is on principal-to-principal basis. The said clause 6 is reproduced herein below: 6. RELATIONSHIP OF PARTIES This agreement is on a principal-to-principal basis and does not create any principal-agent relationship. Nothing contained herein shall be deemed to create any association partnership, joint venture or relationship of principal and agent or master and ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Appellant directly provided the services to the customers without any intervention of the corporate clients and the Appellant is rendering the services under the head of Tour Operator and has correctly availed the abatement under the Notification No. 1/2006-ST dt. 01.03.2006 amended vide 38/2007-ST dt. 23.08.2007 after fulfilling the conditions as prescribed in these notifications. 10. As regards the invocation of extended period of limitation is concerned, we find that the demand of service tax pertains to period 2005-2006 and 2007-2008 whereas the show cause notice was issued on 13.04.2011 only on the basis of audit conducted on 30.03.2009, 31.03.2009, 01.04.2009 and 02.04.2009. The show cause notice invoking extended period of limitation has been issued solely on the basis of audit report without further investigation into the matter. It has been consistently held by the Courts that for invoking the extended period of limitation, intention to evade tax should be established, whereas in the present case, the Appellant has been regularly filing ST-3 returns wherein the abatement availed by the Appellant is duly declared and the department was well aware about the Appellant s act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the word wilful , as was done in the Cosmic Dye Chemical case while construing the proviso to Section 11A, the making of such a wilful misstatement or suppression of facts would attract the provisions of Section 28 of the Customs Act. In each of these appeals it will have to be seen in a fact whether there has been a non-levy or short-levy and whether that has been by reason of collusion or any wilful misstatement or suppression of facts by the importer or his agent or employee. Further, in the case of Bharat Hotels vs. Commissioner of Central Excise (Adjudication) -2017 SCC Online Del 12813, the Hon ble Delhi High Court has observed that: 26. Therefore, it is evident that failure to pay tax is not a justification for imposition of penalty. Also, the word suppression in the proviso to Section 11A(1) of the Excise Act has to be read in the context of other words in the proviso, i.e. fraud, collusion, willful misstatement. As explained in Uniworth case (supra), misstatement or suppression of facts does not mean any omission. It must be deliberate. In other words, there must be deliberate suppression of information for the purpose of evading of payment of duty. It connotes a pos ..... 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