Tribunal dismisses Revenue's appeal on service tax for package tours.

The Tribunal upheld the impugned order, dismissing the Revenue's appeal against M/s Dewan Travels Pvt. Ltd. The respondent was found not liable to pay service tax on package tours and Business Auxiliary Services. The Tribunal determined that the respondent's activities did not qualify as 'export of services' under the Export of Service Rules, 2005, as the services were not performed outside India and payments were not in convertible foreign currency. The Tribunal referenced previous judgments and concluded that the Revenue's arguments lacked merit, leading to the dismissal of the appeal.

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Issues:
1. Whether the respondent is liable to pay service tax on package tours and Business Auxiliary Services.
2. Whether the respondent's activity qualifies as 'export of services' under the Export of Service Rules, 2005.

Analysis:

*Issue 1: Liability for Service Tax on Package Tours and Business Auxiliary Services*

The Revenue appealed against the Order-in-Original dropping proceedings against the respondent, M/s Dewan Travels Pvt. Ltd., for not paying service tax on package tours and Business Auxiliary Services. The Revenue argued that the respondent was providing taxable services but not paying service tax as per the Finance Act, 1994. The Commissioner held that the respondent's promotion of tours did not fall under the definition of 'tour operators service' but under 'Business Auxiliary Service'. The Commissioner also noted that the respondent had deposited service tax liability on Business Auxiliary Services, hence dropping the demand under the tour operator service. The Commissioner further clarified that no service tax was payable on the export of services by the respondent.

*Issue 2: Qualification for 'Export of Services'*

The Revenue contended that the respondent did not fulfill the conditions for 'export of service' as the services were not performed outside India and the payment was not in convertible foreign currency. The Revenue argued that when tourists paid in Indian currency for outbound package tours, there was no convertible foreign exchange remittance, thus not qualifying as 'export of services'. The Revenue disagreed with the impugned order's conclusion that the respondent's tour operator services for outbound package tours amounted to export of services, leading to the respondent not being liable to pay the demanded service tax.

In considering the facts and submissions, the Tribunal referred to previous judgments by CESTAT Delhi in similar cases. The Tribunal noted that the composite activity of operating outbound tours and arranging tours by modes of transport beyond tourist vehicles fell outside the 'Tour Operator' definition. It was also highlighted that services consumed by tourists beyond Indian territory were not leviable to service tax. Based on these precedents, the Tribunal dismissed the Revenue's appeal, finding no merit in the arguments presented.

Therefore, the impugned order was sustained, and the Revenue's appeal was dismissed as lacking merit.

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