2019 (5) TMI 599 - AT - Service Tax

Tribunal ruling: Appeal partially allowed, demands for Tour Operator and Advertisement Services set aside, Chartered Bus Services upheld.

The tribunal partially allowed the appeal, setting aside the demands for Tour Operator (Point to Point) and Advertisement Services but upheld the demands ... Non-payment of service tax - Tour operator services - Appellant providing point to point bus service and chartered bus service - demands made on the appellants put in three categories viz (a) Tour Operator Services (Chartered Bus Booking) (b) Tour Operator Service (Point to Point Bus Service) & (c) Advertisement Services. Tour Operator Service - Point to Point Bus Service - HELD THAT:- Reliance placed in the case of M/S HANS TRAVELS VERSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [2015 (10) TMI 458 - CESTAT NEW DELHI] where it was held that the impugned service rendered by the appellant using a contract carriage would fall under the category of tour operator service - demand upheld. Tour Operator Services - Chartered Bus Booking - Notification No 20/2009-ST dated 07.07.2009 ,as amended by Notification No GSR 622(E) Dated 31.08.2009 - HELD THAT:- In respect of the Services provided in category of Chartered Bus Booking, we find that these services fall within the exclusion category in the said notification. No other exemption has been pointed out which exempts such services. By putting these services under exclusion category in the Notification it is clear that these category of taxable services are not being exempted - demand do not sustain. Advertisement Services - Scope of SCN - HELD THAT:- Commissioner has considered the issue by considering the demand under the taxable category defined by Section 65(105)(zzzzm) viz “sale of space or time for advertisement”. He has after referring to the submissions made and definition as provided by Section 65(105)(zzzzm), held the tax to be demandable in that category. Clearly Commissioner has travelled beyond the show cause notice. Since no demand has been made in the show cause notice under this category we are not in position to sustain the order of Commissioner in this respect - Demand do not sustain. Time limitation - Interest - penalties - HELD THAT:- There are no merits in the submissions made by the appellant against the order of Commissioner, in respect of limitation, interest and penalties - these charges can now be sustained only in respect of the demands which can be sustained on merits i.e. in respect of the Chartered Bus Services. Refund of service tax - time limitation - HELD THAT:- The bar of unjust enrichment as enshrined in Section 11B still needs to be satisfied before the refund could have been paid to the appellant. The order of Commissioner (Appeal) holding that appellants have passed on the burden of the service tax paid on to the recipient of services has not been set aside in appeal before us. Then it is not understood how in subsequent proceedings in respect of same amounts Commissioner (Appeal) has held contrary - Matter needs to be investigated by the Chief Commissioner, because it is submission of the appellants before us that this appeal is infructuous as the amount claimed as refund by them has already been paid to them. Appeal allowed in part. Issues Involved:1. Taxability under the category of 'Tour Operator Services' (Chartered Bus Booking and Point to Point Bus Service).2. Admissibility of exemption under Notification No 20/2009-ST as amended by the corrigendum dated 31.08.2009.3. Retrospective effect to the Notification 20/2009-ST.4. Taxability under the category of Advertisement Services.5. Limitation, interest, and penalty.6. Refund claims.Issue-wise Detailed Analysis:1. Taxability under the category of 'Tour Operator Services' (Chartered Bus Booking and Point to Point Bus Service):The tribunal examined the definitions of 'tour' and 'tour operator' under Section 65 of the Finance Act, 1994 and noted that the term 'tour' always meant a journey from one place to another, and 'tour operator' included any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988. The tribunal found that the appellants' activities fell within these definitions and were taxable. The tribunal referred to several cases, including Ideal Travels and Hans Travels, which supported the taxability of such services.2. Admissibility of exemption under Notification No 20/2009-ST as amended by the corrigendum dated 31.08.2009:The tribunal noted that the notification initially exempted services provided by a tour operator having a contract carriage permit. The corrigendum dated 31.08.2009 extended this exemption to tourist vehicles with permits. The tribunal referred to the explanatory memorandum and the TRU letter, which clarified that the exemption was intended to apply retrospectively from 01.04.2000. The tribunal concluded that the exemption applied to both contract carriage and tourist vehicle permits from the date of the notification.3. Retrospective effect to the Notification 20/2009-ST:The tribunal examined Section 75 of the Finance Act, 2011, which granted retrospective effect to the notification from 01.04.2000. The tribunal rejected the revenue's argument that the retrospective effect did not apply to the corrigendum. The tribunal found that the explanatory memorandum and the TRU letter clearly indicated the intention to extend the exemption retrospectively to both contract carriage and tourist vehicle permits.4. Taxability under the category of Advertisement Services:The tribunal found that the show cause notice demanded service tax under the category of 'advertising agency services,' but the Commissioner confirmed the demand under 'sale of space or time for advertisement services.' The tribunal held that the Commissioner had traveled beyond the show cause notice and set aside the demand for advertisement services.5. Limitation, interest, and penalty:The tribunal upheld the Commissioner's findings on limitation, interest, and penalties for the demands under the category of Chartered Bus Services. The tribunal noted that the appellants had collected service tax from their customers but had not paid it to the government. The tribunal found that the appellants had suppressed facts and were liable for penalties under Sections 76, 77, and 78 of the Finance Act, 1994.6. Refund claims:The tribunal noted that the appellants had filed refund claims for service tax paid during the period 2002-03 to 2006-07. The Assistant Commissioner rejected the claims on the grounds of limitation, unjust enrichment, and on merits. The Commissioner (Appeals) upheld the rejection. The tribunal dismissed the appeal, noting that the appellants had not provided any reasons to show that the order of the Commissioner (Appeals) was illegal. The tribunal found that the appellants had passed on the burden of the tax to the service receivers and were not entitled to a refund.Conclusion:- The tribunal partially allowed the appeal No ST/174/2012, setting aside the demands for Tour Operator (Point to Point) and Advertisement Services but upholding the demands for Chartered Bus Services.- Appeal No ST/345/2012 was allowed.- Appeal No ST/466/2012 was dismissed.(Order pronounced in the open court on 07.05.2019)