9911796707
TMI Blog2024 (12) TMI 1304X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 22.5.2019 has also held similarly in the case of FAIZ TRAVELS, Meerut. The said order of Commissioner (Appeals) Meerut has been brought on record. The ratio of the said decision of Hon'ble CESTAT Allahabad is squarely applicable to the facts of the instant case Relying on the same, Commissioner (Appeals) Meerut has also held accordingly Therefore, following the principle of judicial discipline, I hold that demand of service tax on account of tour operator service in respect of Haj and Umra is not sustainable. 6. Regarding demand of service tax amounting to Rs 8413/ on account of Legal consultancy service, the appellant argues that the impugned payments were made to the Chartered accountant and not to advocates. This fact was also submitted before the adjudicating authority, as recorded in para 38 of the impugned order. However, there is no evidence on record to show that the impugned amount was indeed made to advocate for Legal consultancy service. Thus, there is no ground to levy service tax on the same. 7. From Table-5 and Table-6 of the impugned order, it is apparent that the aggregate amounts received in respect of Travel Agent service and BAS did not cross the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e) & 2 of the Finance Act 1994 as amended read with Section 174 of the Central Goods & Service Tax Act 2017 for the reasons discussed above. (4) I impose a penalty of Rs 67,67,516/- (Rs. Sixty Seven Lacs Sixty Seven Thousand Five Hundred Sixteen only)upon M/s Chishti Travel & Tour, 88/185, Chaman Ganj, Kanpur, under the provisions of Section 78 of the Finance Act 1994 as amended read with Section 174 of the Central Goods & Service Tax Act 2017." 2.3 Aggrieved respondent have filed appeal before Commissioner (Appeals), who allowed the appeal in favour of the respondent. 2.4 Aggrieved revenue has filed this appeal on the following grounds:- "1. The Commissioner (Appeal) Allahabad while allowing the appeal and set aside the O- in-O has placed reliance on the Tribunal Final Order No. Final Order No.70767/2019 dated 10.4.2019 in the case of M/s National Tour & Travels Agency Rampur. It is relevant to mention that the Tribunal while passing the order in the case of M/s National Tour & Travels Agency has placed reliance in the case of M/s Cox & Kings India Ltd. Vs Commissioner of Service Tax, Delhi [2014(35) STR 817 (Trib-Delhi)] and Commissioner Vs Atlas Tour & Travels (P) Ltd. [20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of payment till the actual payment of Service Tax on appropriate rates. iii. Whether Penalty not be imposed upon them under the provisions of sub Section (1) (a), (b), (c) (i)(ii) & (iii), (d), (e) & (2) of Section 77 & Section 78 of the Finance Act, 1944 read with Section 174 of the Central Goods & Service Tax Act 2017 for the reasons discussed hereinabove. 44. To arrive at the correct position I have examined the defence reply of the party dated 03.05.2018 as well as submissions made at the time of personal hearing. The party in their defence reply specifically discussed about the exemption available to Haj Pilgrimage or Umrah. They have submitted that the provisions of Sections 65(105)(n) and 66 of the Finance Act, 1994, Rule 3(2) of Export of Service Rules, 2005, Section 66B of the Finance Act, 1994, Rules GA of The Service Tax Rules, 1994 and Rule 8 of place of Provision of Services Rules, 2012 are not applicable on the Haj/Umrah Group organizers' services. In support of this they have cited the decision taken by the Hon'ble CESTAT Mumbai in the case of M/s Akbar Travels of India Pvt. Ltd Vs CCE-2016-TIOL-2410-CESTAT-Mum wherein it has been held that services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have referred to Notification No 25/2012- ST (S.No. 5) wherein to conduct any religious Ceremony is exempted. 50. I have examined the issue relating to Tour operator Service for the pilgrimage/Umrah/to conduct any religious Ceremony as referred to in the defence. It is worth to mention that "Conduct of any religious ceremony" as referred to at Sl. No. 5 of Notification No 25/2012-ST dated 20.06.2012 has no relevancy to the Tour Operator Services for Huj pilgrimage or Umrah as submitted by the party. 51. Further Notification No. 25/2012-ST dated 20.06.2012 provides the following exemption in relation to the Tour Operator Services: a: "SA. Services by a specified Organization in respect of religious pilgrimage facilitated by the Ministry of External Affairs of the Government of India, under bilateral arrangement, (Added by Notification No 17/2014 dated 20.08.2014) b. B. 42. Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside India (Added by Notification No. 6/2014 dated 11.07.2014) 52. Further Serial No. 5A inserted in Notification No. 25/2012 dated 20.06.2012 grants exemption to services in relation to tours under ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Chishti Travel & Tour, 88/185, Chaman Ganj, Kanpur have claimed the deduction with supportive evidences and therefore the request in this regard is not sustainable at the same time CENVAT Facilities had been. available to them which they have failed to claim during the relevant period. 59. Further with regard to availability of the exemption of Rs 10 Lacs it is very much necessary to refer the contents of Notification No 33/2012-ST dated 26.06.2012 which is very much relevant in the case with regard to availability of basic exemption which is referred to as under: "(vii) where a taxable service provides one or more taxable services from one or more premises, the exemption under this notification shall apply to the agaregate value of all such taxable services and premises, does not exceed ten lakh rupees in the preceding financial year." 60. It is very much evident from the working of Taxable services as well as Service tax Involved therein as reported under different table in the show cause notice referred to in the case, that the total amount involved therein for the taxable service is much more than the exemption limit as provided under the Notification No. 33/2012-ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty had rendered themselves liable to penal action under Section 78 of the Finance Act, 1994. Accordingly same is imposable upon them. 63. In the instant case, element of suppression of facts as well as deliberate evasion of Service Tax by the party have got proved as discussed in above paras. Therefore, I am of the view penalties under Section 77(1)(d) for not depositing Service Tax in due time as per Rule 6 of the Service Tax Rules 1994 and Section 68 of the Act is imposable upon the party. I also observed that the party even failed to keep, maintain or retain books of accounts and other documents as required in accordance with the provisions or the Rules made thereunder & contravened such provisions and liable to penalty under Section 77(b), failed to furnish true and correct information and documents made them liable to be penalized under Section 77(c) and failed to issue invoices in accordance with the provisions of the Act or Rules made thereunder made them liable to be penalized under Section 77(e) of the Finance Act 1994. 64. With regard to Charging of Interest, I find that Section 75 of the finance Act, 1994 provided that every person, liable to pay the tax on accorda ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... these services for the period post introduction of Negative List concept for levy of service tax (i.e. from 01.07.2012) is no longer res-integra and has been decided by Hon'ble Supreme Court in the case of All India Haj Umrah Tour Organizer Association Mumbai [2022 (63) GSTL 129 (SC)], wherein following has been held:- "CONSIDERATION OF SUBMISSIONS 33. The service tax was introduced by way of the Finance Act. The Finance Act incorporated various services which were made subject to payment of service tax. The services were enumerated in clause 105 of Section 65 of the Finance Act. 34. Service tax is an indirect tax which is leviable on the service provider who is the taxable person. The service tax is a tax on service rendered. It is not a direct tax on service provider but a value-added tax on the activity by way of service. The service provider can pass on the burden of payment of service tax to the service recipient. In this group of petitions, we are concerned with the negative service tax regime, which was introduced with effect from 1st of July 2012 by incorporation of Sections 66B and 66C by the Finance Act, 2012. When this regime was introduced with effect from 1st Jul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uran, the Haj pilgrimage is one of the five pillars or duties of Islam. Haj takes place only once a year in the twelfth and final month of Islamic lunar calendar. Pilgrimage undertaken to Mecca at other times is known as Umrah. During the five days of Haj, the pilgrims are required to perform a series of rituals, the details of which are not relevant for deciding the issues involved in these petitions. 37. To enable Haj pilgrims of India to undertake Haj pilgrimage, there is a bilateral agreement executed every year between the Kingdom of Saudi Arabia and the Government of India. As per the bilateral agreement, a quota of number of pilgrims is assigned to India. Out of the said quota, normally only 30% is allocated to HGOs. The rest of the quota is made available to the Haj Committee. 38. HGOs render services to Haj pilgrims by purchasing flight tickets, arranging and making payments for accommodation in Saudi Arabia, arranging and making available food during their stay in Saudi Arabia, arranging and making payments for transportation in Saudi Arabia and providing foreign exchange in the form of Saudi Riyals. As stated in the written submissions filed by Shri Arvind P. Datar, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tablishment; or (iii) where services are used at more than one establishment, whether business or fixed, the establishment most directly concerned with the use of the service; and (iv) in the absence of such places, the usual place of residence of the recipient of service. Explanation:- For the purposes of clauses (h) and (i), "usual place of residence" in case of a body corporate means the place where it is incorporated or otherwise legally constituted. Explanation 2:- For the purpose of clause (i), in the case of telecommunication service, the usual place of residence shall be the billing address. "3. Place of provision generally - The place of provision of a service shall be the location of the recipient of service: Provided that in case "of services other than online information and database access or retrieval services" (Inserted vide Notification 46/2012- Service Tax) where the location of the service receiver is not available in the ordinary course of business, the place of provision shall be the location of the provider of service. 4. Place of provision of performance based services.- The place of provision of following services shall be the location where the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at a place of business for which the registration has been obtained, the location of such place of business; (b) where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment; (c) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and (d) in absence of such places, the location of the usual place of residence of the recipient; (15) location of the supplier of services means,-- (a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business; (b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment; (c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sence of such contract or agreement, on such other basis as may be prescribed. (4) The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery shall be the location where the services are actually performed. (5) The place of supply of services in relation to training and performance appraisal to,-- (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location where the services are actually performed. (6) The place of supply of services provided by way of admission to a cultural, artistic, sporting, scientific, educational, entertainment event or amusement park or any other place and services ancillary thereto, shall be the place where the event is actually held or where the park or such other place is located. (7) The place of supply of services provided by way of,- (a) organisation of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to a conference, fair, exhibition, celebration or similar events; or (b) services ancillary to organi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , cable and direct to home television services to any person shall,- (a) in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, be the location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services; (b) in case of mobile connection for telecommunication and internet services provided on post-paid basis, be the location of billing address of the recipient of services on the record of the supplier of services; (c) in cases where mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment basis through a voucher or any other means,-- (i) through a selling agent or a re-seller or a distributor of subscriber identity module card or re-charge voucher, be the address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply; or (ii) by any person to the final subscriber, be the location where such prepayment is received or such vouchers are sold; (d) in other cases, be the address of the recipient as per the records of the supplier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis as may be prescribed. Section 13. Place of supply of services where location of supplier or location of recipient is outside India - (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services: Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services. (3) The place of supply of the following services shall be the location where the services are actually performed, namely :- (a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services: Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e location of the supplier of services, namely:-- (a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b) intermediary services; (c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month. Explanation.--For the purposes of this sub-section, the expression,-- (a) "account" means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account; (b) "banking company" shall have the same meaning as assigned to it under clause (a) of section 45A of the Reserve Bank of India Act, 1934 (2 of 1934); (c) ''financial institution" shall have the same meaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934 (2 of 1934); (d) "non-banking financial company" means,-- (i) a financial institution which is a company; (ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of the 2012 Rules and the relevant provisions of IGST Act are to a great extent pari materia. As far as the location of service provider in this case (HGOs) is concerned, there is no dispute that all of them have to be registered under Rule 4 of the Service Tax Rules, 1994 and therefore, as per sub-clause (a) of clause (h) of Rule 2, the location of HGO will be the premises for which registration has been granted to HGO. Such premises are necessarily in India. Even assuming that any other sub-clauses of clause (h) are applicable, the location of the service provider, in this case, will be in India. As far as the location of service receiver under clause (i) of Rule 2 is concerned, in this case, the service receiver is the Haj pilgrim who is obviously not registered. Therefore, sub-clause (a) of clause (i) will have no application. There are four categories listed in sub-clause (b) of clause (i) of Rule 2. The first category is of business establishments. The second category is of services which are used at a place other than the business establishment. The third category is where services are used at more than one establishment. On the face of it, the cases of Haj pilgrim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cultural, artistic, sporting, scientific, educational, or entertainment event, or a celebration, conference, fair, exhibition, or similar events, and of services ancillary to such admission, shall be the place where the event is actually held." Religious ceremonies and religious functions are not covered by Rule 6. The words 'similar events' will have to be construed ejusdem generis. Hence, the Haj pilgrimage cannot be an event. 42. Even if we assume that the service rendered by HGOs to Haj pilgrims is transportation service, by virtue of Rule 9 of the 2012 Rules, the place of provision of service will be the location of service provider. In view of sub-Section (10) of Section 12 of the IGST Act, the place of supply of service will be the place where the passenger embarks. 43. As per Item (iv) of sub-clause (b) of Clause (i) of Rule 2 of the said Rules of 2012, the location of the service receiver will be the usual place of residence of the Haj pilgrim in India. Therefore, the service rendered by the HGOs to Haj Pilgrims is taxable for service tax as the service to Haj pilgrims is provided or agreed to be provided in taxable territory. The service is rendered by providing or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hasis added) 47. Ex facie, Clause 5A will have no application as it is applicable to services by specified organisations in respect of a religious pilgrimage facilitated by the Ministry of External affairs of the Government of India under bilateral arrangement. The specified organisations have been defined in paragraph 1(1)(a)(zfa) of the Mega Exemption Notification. Specified organisations, as stated therein, are only two categories of organisations. The first one is Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand Undertaking and Haj Committee or State Committee under the said Act of 2002. The Haj Committee renders services in relation to the Haj pilgrimage which is facilitated by the Ministry of External Affairs of the Government of India under the bilateral arrangement with the Kingdom of Saudi Arabia. 48. In support of the contention that the Clause 5(b) of the Mega Exemption Notification is applicable, Shri Arvind P. Datar, the learned senior counsel with all fairness pointed out that in the case of Commissioner of Customs (Import) Mumbai v. Dilip Kumar and Company and Ors. 2018 (9) SCC 1, a Constitution Bench of this Court held that an exemption notificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otion of certain activities should be liberally interpreted. This composite rule is not stated in any particular judgment in so many words. In fact, majority of judgments emphasise that exemptions are to be strictly interpreted while some of them insist that exemptions in fiscal statutes are to be liberally interpreted giving an apparent impression that they are contradictory to each other. But this is only apparent. A close scrutiny will reveal that there is no real contradiction amongst the judgments at all. The synthesis of the views is quite clearly that the general rule is strict interpretation while special rule in the case of beneficial and promotional exemption is liberal interpretation. The two go very well with each other because they relate to two different sets of circumstances." (Emphasis added) Thereafter, in paragraph 25, this Court referred to and quoted the relevant portion of the Constitution Bench decision in the case of Dilip Kumar and Company20. In paragraphs 26 and 27, this Court proceeded to hold thus: "26. It may be noticed that the five-Judge Bench judgment [Commr. of Customs v. Dilip Kumar & Co., (2018) 9 SCC 1] did not refer to the line of authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The notification does not say that service provided to the service receiver to enable him to conduct religious ceremony, has been exempted. It only exempts service provided by way of conduct of any religious ceremony. 52. It must be noted here that Clause 5A of the same Mega Exemption Notification grants exemption to the service rendered by Haj Committees in respect of a religious pilgrimage. Thus, the same Mega Exemption Notification makes a clear distinction between 'religious ceremony' and 'religious pilgrimage'. As Haj Committees render services only in respect of Haj pilgrimage, the religious pilgrimage referred to in Clause 5A as regards the Haj Committee, is Haj pilgrimage. Thus, the Mega Exemption Notification exempts the two specified organisations that render services in respect of a religious pilgrimage. This exemption under Clause 5A is not applicable to HGOs as the HGOs are not the specified organizations. If the intention and object was to provide service tax exemption to services provided by HGOs in respect of religious pilgrimage, the notification would have specifically provided so. However, the exemption as regards religious pilgrimage has been confined only t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ier, HGOs have no role to play in actual conduct of religious ceremonies which are a part of Haj pilgrimage. The service rendered by HGOs is by way of providing air bookings, arranging for the stay of Haj pilgrims in Saudi Arabia, arranging for food while they are in Saudi Arabia, arranging for foreign exchange and arranging registration with Tawafa establishment in the Kingdom of Saudi Arabia. 54. An attempt was made to bifurcate the services rendered by HGOs into two parts. The first part is of the service rendered regarding providing air booking and making available foreign exchange. A submission was made that service tax or GST will be payable on these two items and for the rest of the services rendered, service tax or GST will not be payable as the services rendered are outside the taxable territory. HGOs render service to Haj pilgrims in respect of the Haj pilgrimage by providing a single package which consists of several parts such as making air booking, providing foreign exchange and making arrangements for stay and catering in Saudi Arabia, etc. HGOs offer a comprehensive package of services relating to Haj pilgrimage. They receive charges from Haj pilgrims for the entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts except for the fact that the service tax is chargeable under these two statutes and not under the Finance Act. Thus, the HGOs supply service to the service recipient having location in India. The service is rendered by providing a package for the Haj Pilgrimage to the service recipient who is located in the taxable territory. That is how the service provided by HGOs is taxable for service tax. CONSIDERATION OF THE ISSUE OF DISCRIMINATION 56. The other issue which arises for consideration is about the submissions based on discrimination made under the Mega Exemption Notification between the services rendered by specified organisations and the services rendered by other service providers in respect of religious pilgrimage. 57. The submission of the petitioners is that there is no difference between the service rendered by HGOs and the service rendered by the Haj Committee to the Haj pilgrims. It is contended that the nature of service rendered by both is the same. The submission of the petitioners is that for the purposes of this exemption, the Haj Committee cannot constitute a class in itself. In short, the submission is that two equals are being treated as unequal. The qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arrangements for travel by air or any other means, and to advise in matters relating to accommodations; (v) to approve the budget estimates of the Committee and submit it to the Central Government at least three months before the beginning of the financial year for its concurrence; (vi) to co-ordinate with the Central Government, railways, airways and travel agencies for the purpose of securing travelling facilities for pilgrims; (vii) to generally look after the welfare of the pilgrims; (viii) to publish such proceedings of the Committee and such matters of interest to pilgrims as may be determined by bye-laws made in this behalf by the Committee; (ix) to discharge such other duties in connection with Haj as may be prescribed by the Central Government. (2) The Central Government shall afford all reasonable assistance to the Committee in the discharge of the duties specified in sub-section (1)." 58. Under Section 27 of the 2002 Act, it is the duty of the State Committees to implement the policies and directions of the Haj Committee and perform prescribed duties. The functions and duties assigned to the Haj Committee need to be considered in the context of the preambl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kingdom of Saudi Arabia for undertaking the Haj pilgrimage, there is a complete absence of profit motive. On the contrary, the money received by the Haj Committee from the Haj pilgrims goes to the statutory fund, which in turn, has to be used inter alia for the benefit of Haj pilgrims. Even the budget of the Haj Committee is required to be submitted to the Central Government. Thus, the Central Government has all pervasive control over the Haj Committee. The State Governments have the same control over the State Committee. On the other hand, there are no onerous duties attached to HGOs. They earn profit by rendering service to Haj pilgrims. Except for the stringent conditions for the registration, the Government has no control over HGOs. 59. Shri Gopal Sankarnarayanan, the learned senior counsel relied upon certain observations made by this Court in the case of Rafique Sheikh Bhikan1. He relied upon paragraphs 11 and 12 of the said judgment, which read thus: "11. The pilgrim is actually the person behind all this arrangement. For many of the pilgrims Haj is once in a lifetime pilgrimage and they undertake the pilgrimage by taking out the savings made over a lifetime, in many ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the controversy before this Court. It can be seen from paragraph 17 of the said decision that the controversy was about the stringent conditions imposed for the registration of PTOs. The observations in paragraph 12 are in that context. This Court held that the object of putting such stringent conditions is to ensure that proper service is rendered to the Haj pilgrims. In this context, the aforesaid observation has been made that the reasonable profit to PTOs is incidental. It is not the case of the HGOs in these petitions that they are doing any kind of charitable work by providing service to Haj pilgrims. It is not their case that they are not earning any profit while providing a package to Haj pilgrims. They are rendering the services with the object of earning profit. 60. Thus, the Haj Committee is a statutory committee which is entrusted with various functions for the welfare of Haj pilgrims. Moreover, the profit motive is completely absent in the case of the Haj Committee. The money received by the Haj Committee from the pilgrims for rendering service goes to a statutory fund created under the 2002 Act which is to be used only for the purposes specified in the 2002 Act. Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Government of India, under a bilateral arrangement, is exempt from GST. "Specified organizations" are Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand Undertaking and 'Committee' or "State Committee as defined in section 2 of the Haj Committee Act, 2002 (35 of 2002). GST is leviable on tour operator service for organizing Haj/Umrah pilgrimage tour. GST exemption is available only on services of religious pilgrimage facilitated by Central govt or State govt, under a bilateral arrangement. There is no exemption available to services of religious pilgrimage of any religion provided by any private tour operator. Therefore, existing exemption available on services of religious pilgrimage facilitated by Government of India is not discriminatory. The legislature intends to exclude private tour operators from the purview of Service Tax/GST exemption. Catena of court judgments have upheld that legislature has wide latitude in taxation to choose the subject and people to be taxed. Article 14 prohibits class legislation and not reasonable classification. It is very much within the powers of legislature to categorize goods and services for the purpose of taxatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the tax is not on the suppliers but on the recipients. The service was taxable in Service Tax also. There is no justification for granting a new exemption. Exemptions not only cause loss of revenue but also block input tax credit chain and credit distortions." (Emphasis added) The reasons recorded are based on consideration of relevant factors. 63. Strong reliance was placed by the Revenue on the decision of this Court in the Case of M. Jhangir Bhatusha & Ors13. The subject of this petition was an order passed by the Government under sub-Section (2) of Section 25 of the Customs Act, 1962. By the said order, import of the specified oils by the State Trading Corporation was made liable to customs duty at the rate of 5% only and total exemption from auxiliary and additional duty was granted. On the other hand, import of the same specified oils by private importers was made liable to customs duty at the rate of 12.5% ad velorem. Discrimination was alleged in this case by contending that there is no rational basis for treating State Trading Corporation differently. In paragraphs 13 to 15 of the said decision, this Court held thus: "13. First, as to the contention that both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is the Central Government which has to be satisfied, as the authority appointed by Parliament under Section 25(2), that it is necessary in the public interest to make the special orders of exemption. It has set out the reasons which prompted it to pass the orders. In our opinion, the circumstances mentioned in those notifications cannot be said to be irrelevant or unreasonable. It is not for this Court to sit in judgment on the sufficiency of those reasons. The limitations on the jurisdiction of the court in cases where the satisfaction has been entrusted to executive authority to judge the necessity for passing orders is well defined and has been long accepted. 14. It is true that the State dons the robes of a trader when it enters the field of commercial activity, and ordinarily it can claim no favoured treatment. But there may be clear and good reason for making a departure. Viewed in the background of the reasons for granting a monopoly to the State Trading Corporation, acting as an agent or nominee of the Central Government in importing the specified oils, it will be evident that policy considerations rendered it necessary to make consummation of that policy effective by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry". (Emphasis added) In the matter of grant of exemptions in tax matters, latitude has to be given to the decision making. Ultimately, it is also a matter of policy. We have already held that there is a rational basis for classifying specified organisations as a class and keeping out the Private Tour Operators from exemption under Clause 5A. We will have to show judicial self-restraint in this case. 65. Hence, we are of the considered view that the arguments based on discrimination have no substance at all, as HGOs and the Haj Committees do not stand on par and in fact, the Haj Committees constitute a separate class by themselves, which is based on a rational classification which has a nexus with the object sought to be achieved." 4.4 In view of the above decision, the dispute with regards to applicability of service tax (post 01.07.2012) in respect of these services provided by private tour operator in respect of Haj and ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
