Tribunal rules in favor of appellant, setting aside service tax demands and penalties

The Tribunal ruled in favor of the appellant, setting aside the demand for service tax on excess baggage charges, Cenvat credit for services availed before operations, and service tax on manpower recruitment reimbursement. No penalties were imposed, and the appeal was allowed.

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Issues:
1. Demand of service tax on excess baggage charges.
2. Demand of Cenvat credit for services availed prior to actual operations.
3. Service tax on manpower recruitment and supply reimbursement.

Analysis:
1. The first issue concerns the demand of service tax on charges for excess baggage carried by passengers. The appellant argued that no service tax should be levied as they provide a single service to passengers, with extra charges only for excess luggage. They cited a Tribunal decision and Supreme Court approval in a similar case to support their stance. The Tribunal ruled in favor of the appellant, setting aside the demand for service tax on excess baggage charges.

2. The second issue revolves around the demand of Cenvat credit for services availed before the commencement of operations. The appellant claimed Cenvat credit for setting up operations, citing various decisions to support their position. The Tribunal referred to a case where denying Cenvat credit was deemed unsustainable, setting aside the demand for Cenvat credit in this case as well.

3. The third issue pertains to service tax on reimbursement of certain expenses related to manpower recruitment and supply. The appellant argued that the reimbursement was for excess insurance charges only and should not be taxed. Citing relevant court decisions, the Tribunal agreed with the appellant, setting aside the demand for service tax on the reimbursement. As all demands were set aside, no penalties were imposed, and the appeal was allowed accordingly.

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