Tribunal rules visa services not taxable, remands cargo agreement issue for review

The Tribunal upheld the appellants' contention that visa services provided by them do not fall under taxable services, setting aside the demand related to visa services. The issue regarding the cargo general sales agreement was remanded back to the original authority for further evaluation. The Tribunal found the subsequent increase in penalty by the Commissioner to be invalid, stating that it amounted to a review of the original order without proper authority.

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Issues:
1. Whether the appellants are liable to pay service tax for rendering Business Auxiliary Service as alleged by the Department.
2. Whether the activities related to visa services provided by the appellants are taxable under Section 65(105) of the Finance Act, 1994.
3. Whether the cargo general sales agreement entered into by the appellants is taxable under Section 65(105)(zzb) of the Finance Act, 1994.
4. Whether the subsequent increase in penalty under Section 76 from Rs. 100 per day to Rs. 200 per day by the Commissioner is valid.

Analysis:
1. The appellants were alleged to provide Business Auxiliary Service under Section 65(19) of the Finance Act, 1994, resulting in a demand for service tax. The Order-in-Original confirmed the demand, which was challenged in the appeal. The appellants argued that visa services provided by them do not fall under taxable services as per Circular No.137/06/2011-ST. The Tribunal upheld the appellants' contention, citing precedents and the Circular, thereby setting aside the demand related to visa services.

2. The appellants contended that the cargo general sales agreement is not taxable under Section 65(105)(zzb) of the Finance Act, 1994, as it falls under Rule 3(3) of Export of Service Rules, 2005. The Tribunal remanded this issue back to the original authority for further evaluation based on evidence provided by the appellants to determine if the services qualify as export of services.

3. The Commissioner sought to increase the penalty under Section 76 from Rs. 100 to Rs. 200 per day through a subsequent show-cause notice. The Tribunal found this action to be an error as it amounted to a review of the original order without proper authority. The Tribunal set aside the subsequent order, stating that the Department should have filed an appeal if there were concerns about the original order.

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