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Issues: (i) Whether the appellant's activity of operating point-to-point buses and leasing buses for passenger transport was taxable as tour operator service and, if so, whether the retrospective exemption under Notification No. 20/2009-S.T. applied; (ii) Whether the commission received from bus ticket booking for other operators was taxable as Business Auxiliary Service and whether limitation and penalty required reconsideration.
Issue (i): Whether the appellant's activity of operating point-to-point buses and leasing buses for passenger transport was taxable as tour operator service and, if so, whether the retrospective exemption under Notification No. 20/2009-S.T. applied.
Analysis: The activity of transporting passengers by buses on pre-determined routes fell within the ambit of tour operator service as understood in the statutory definition and the settled interpretation applied by the Tribunal. At the same time, the appellant's alternative claim to exemption had force because Notification No. 20/2009-S.T. was given retrospective effect from 1.4.2000 by Section 72 of the Finance Act, 2011, and the activity covered by the notification was exempted from service tax.
Conclusion: The demand under tour operator service was not sustainable and was set aside in favour of the assessee.
Issue (ii): Whether the commission received from bus ticket booking for other operators was taxable as Business Auxiliary Service and whether limitation and penalty required reconsideration.
Analysis: The amounts received for booking tickets for other operators were held to be consideration for promoting or marketing the services of client operators and therefore fell within Business Auxiliary Service. However, the appellant's contention on invocation of extended limitation and the consequential penalty position had not been specifically examined at the stage of the impugned order, so those aspects required fresh consideration by the original authority.
Conclusion: The taxability under Business Auxiliary Service was upheld on merits, but the quantum of demand and the issue of limitation and penalty were remitted for reconsideration, partly in favour of the revenue.
Final Conclusion: The appeal succeeded only to the extent of deleting the tour operator demand, while the Business Auxiliary Service demand survived on merits subject to fresh determination of quantum and penalty.
Ratio Decidendi: Where a statutory exemption is retrospectively extended to cover the assessee's activity, the corresponding service tax demand cannot survive, but payments for promoting another operator's services remain taxable as Business Auxiliary Service and related limitation and penalty issues must be independently examined.
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