2013 (12) TMI 39 - AT - Service Tax

Tour operator liable for service tax despite permits; exemption claims rejected. Tribunal upholds decision.

The appellant, a tour operator, was found liable for service tax as evidenced by holding All India Tourist Permits. The benefit of abatement under ... Penalty under Sections 76, 77 and 78 - The appellant was a registered tour operator but failed to file any returns nor remitted any tax - Notification No.15/2007/ST, dated 04.04.2007 - Held that:- . As the appellant is not entitled to the benefits under Notification No.25/2004/ST, dated 10.09.2004 (being a tour operator engaged in the business of operating tours in tourist vehicle covered by the permit granted under Motor Vehicles Act), it cannot claim exemption on the basis of this exemption Notification. The order of the Commissioner (Appeals) dated 04.02.2013 is therefore correct in its conclusion though for inadequate reasons recorded. In any event the appeal is against the conclusion and the conclusion of the appellate authority for the reasons we have recorded, is impeccable - Decided against assessee. Issues:1. Service tax liability of the appellant as a tour operator.2. Benefit of abatement under Exemption Notification No.15/2007/ST.3. Claim to immunity based on Exemption Notification No.25/2004/ST.4. Adequacy of reasons for rejecting appellant's contentions.Issue 1: Service tax liability of the appellant as a tour operator:The appellant, a registered tour operator, failed to file returns or remit tax for the period 01.09.1997 to 30.11.2002. The Tribunal rejected the appellant's contention of not being a tour operator based on evidence of holding All India Tourist Permits and operating as a tour operator, making the appellant liable for service tax.Issue 2: Benefit of abatement under Exemption Notification No.15/2007/ST:The Commissioner (Appeals) granted the benefit of abatement of 60% under the exemption notification for the period 01.04.2000 to 04.02.2004. The appellant did not contest this determination as the benefit was not applicable for any period prior to 01.04.2000.Issue 3: Claim to immunity based on Exemption Notification No.25/2004/ST:The appellant's claim for immunity to service tax liability under Exemption Notification No.25/2004/ST was rejected as the notification disallowed exemption for services provided by a tour operator engaged in operating tours in a tourist vehicle covered by permits granted under the Motor Vehicles Act. The appellant, being a tour operator holding All India Tourist Permits, was deemed ineligible for the exemption.Issue 4: Adequacy of reasons for rejecting appellant's contentions:The appellant argued that the appellate authority did not provide clear and adequate reasons for rejecting its contentions. While acknowledging some merit in this submission, the Tribunal noted that the Commissioner (Appeals) should have independently assessed the appellant's claim under Notification No.25/2004/ST instead of relying on reasons from a previous order. Despite the inadequacy in reasoning, the Tribunal upheld the conclusion that the appellant was not entitled to exemption under the said notification.In conclusion, both appeals were dismissed due to the appellant's ineligibility for the claimed exemptions and the adequacy of reasons for rejecting the contentions, although costs were not awarded in this case.