Users fee for airport passengers not part of taxable airport service value absent quid pro quo for any specific service.

Users fee collected from outgoing international passengers was held not includable in the assessable value of Airport Services because it was raised to augment airport resources and was not shown to be consideration for any specific service to individual passengers. The airport services were separately rendered by airlines and the Airport Authority of India, and the fee lacked the required quid pro quo with the taxable service. As no particular service by the appellant was identified to support inclusion in the taxable base, the Service Tax demand, with interest and penalties, was unsustainable.

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Issues: Whether the amount collected as users fee from outgoing international passengers was liable to Service Tax as part of the value of Airport Services.

Analysis: The collection was made to augment the financial resources of the airport and was not shown to be a payment for any specific service rendered to individual passengers. The services at the airport were separately rendered by airlines and the Airport Authority of India, and the fee did not have the character of quid pro quo for services by the appellant. The earlier High Court view on unauthorized collection of a similar fee supported the conclusion that the levy had no real connection with the taxable airport services. The adjudicating authority had not identified any particular service provided by the appellant to justify inclusion of the fee in the taxable base.

Conclusion: The users fee was not includable in the assessable value for Airport Services and the demand of Service Tax, interest, and penalties was unsustainable.

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