2017 (12) TMI 1493 - AT - Service Tax

Tribunal Grants Stay on Service Tax Demand, Finds Appellant Exempt

The Tribunal granted a stay on the demand for service tax and allowed the appeal, setting aside the impugned order. The appellant's services were found to ... Levy of service tax - tour operator service - exemption Notification No. 20/2009-S.T., dated 7-7-2009 - Held that: - the services of the type rendered by the appellant have been exempted from payment of service tax vide Notification No.20/2009. This notification has further been amended to give retrospective effect as per Section 75 of the Finance Act, 2011. The retrospective benefit has been granted for the period with effect from 01/04/2000 - demand of tax not justified. Similar issue decided in the case of A. MANIMEGALAI Versus COMMISSIONER OF C. EX. (SERVICE TAX), SALEM [2014 (6) TMI 490 - CESTAT CHENNAI], where it was held that activity undertaken by the appellants was exempted by Notification No. 20/2009-S.T., dated 7-7-2009 and the retrospective effect was granted to the exemption through Section 75 of the Finance Act, 2011 and the same is applicable from 1-4-2000. Appeal allowed - decided in favor of appellant. Issues:Classification of service under tour operator service for point-to-point transportation, retrospective exemption of service tax under Notification No.20/2009, validity of demand for service tax, applicability of Finance Act, 2011.Analysis:The appeal and stay application were filed against the Order-in-Original No. 08-2012, where the appellant was demanded service tax for transporting passengers on a point-to-point basis with vehicles having contract carriage permit under tour operator service. The adjudicating authority classified the service under tour operator service, leading to the demand for service tax amounting to &8377; 3,89,94,528 for the period 01/04/2005 to 31/03/2010. The appellant contested this demand through the appeal and stay application.The appellant's counsel argued that Notification No.20/2009 exempted services provided by tour operators with contract carriage permit for point-to-point transportation. A subsequent corrigendum extended this exemption to vehicles with a permit, with retrospective effect from 01/04/2000 under the Finance Act, 2001. The CBEC Circular clarified the exemption for tour operators undertaking point-to-point transportation with vehicles bearing contract carriage permit. The appellant contended that the entire demand should be set aside based on these legal provisions.After hearing both sides, the Tribunal granted a stay on the demand and proceeded with the appeal. The Tribunal noted that the appellant's services were exempted from service tax under Notification No.20/2009, which was amended retrospectively from 01/04/2000 under Section 75 of the Finance Act, 2011. Citing previous Tribunal decisions, the Tribunal held that the demand for service tax on the appellant's activities was not justified, as similar exemptions were granted to tour operators. The Tribunal set aside the impugned order and allowed the appeal with consequential relief, disposing of the stay application accordingly.In a related case, the Tribunal observed that the intent behind the exemption Notification No.20/2009 was to provide parity between public and private point-to-point operations. The corrigendum circular eliminated the distinction between tourist vehicles and contract carriages for the same activity. The Tribunal held that the appellant was entitled to exemption from tax on collections generated from the use of tourist buses for passengers, aligning with the retrospective exemption granted by the Central Government. Following these precedents, the Tribunal set aside the impugned order, allowed the appeal, and disposed of the stay application.In conclusion, the Tribunal's decision was based on the retrospective exemption granted under Notification No.20/2009 and subsequent amendments, aligning with previous Tribunal judgments. The impugned order demanding service tax was set aside, and the appeal was allowed, providing relief to the appellant in line with the legal provisions and interpretations presented during the proceedings.