Appellant wins appeal on service tax exclusion, overturning liability order. The Tribunal ruled in favor of the appellant, holding that airport tax and passenger service fee should not be included in the assessable value for ...
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Appellant wins appeal on service tax exclusion, overturning liability order.
The Tribunal ruled in favor of the appellant, holding that airport tax and passenger service fee should not be included in the assessable value for service tax purposes, based on established legal precedents. The impugned order confirming service tax liability, interest, and penalties was set aside, and the appeal was allowed in favor of the appellant. Additionally, a miscellaneous application filed by the appellant for additional grounds and evidence was disposed of as the appeal was allowed on merits.
Issues: Valuation of services for service tax purposes
In this case, the appellant, engaged in providing passenger transport services by air for international journeys, was registered with the Service Tax Department for payment of service tax. The dispute arose regarding the inclusion of airport tax and passenger service fee in the assessable value of the services provided by the appellant. The impugned order confirmed service tax liability, interest, and penalties based on this valuation issue.
Both parties agreed that a previous Tribunal decision in the case of M/s Continental Airlines Inc. vs CST, New Delhi, held that airport taxes and passenger service fees collected by airlines on behalf of airports are not includable in the assessable value for service tax levy. Following this precedent, the Tribunal set aside a service tax demand against the present appellant in a similar case involving Lufthansa German Airlines vs CST (Adjn.), New Delhi.
Considering the settled issue based on the Tribunal's previous decisions, the impugned order was set aside, and the appeal was allowed in favor of the appellant. Additionally, a miscellaneous application filed by the appellant for additional grounds and evidence was disposed of as the appeal was allowed on merits.
Therefore, the Tribunal ruled in favor of the appellant, holding that the airport tax and passenger service fee should not be included in the assessable value for the purpose of service tax levy, based on established legal precedents and interpretations.
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