Tribunal rules Airport Authority liable, not appellant, for service tax on admission tickets

The Tribunal ruled in favor of the appellant, stating that the liability for service tax on airport admission ticket charges lay with the Airport Authority of India, not the appellant. The appellant was deemed a collecting agent and not liable for the service tax. The Tribunal also overturned the penalty imposed on the appellant, considering their compliance with the Airport Authority's instructions regarding service tax collection.

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Issues: Liability of service tax on airport admission ticket charges collected by the appellant, authority to collect service tax, imposition of penalty.

Analysis:
1. Liability of service tax: The appellant, a proprietor of M/s. Sparkway Enterprises, collected "Airport Admission Ticket Charges" under a license from the Airport Authority of India. The Revenue contended that these charges constituted airport services and were subject to service tax. However, the Tribunal noted that the appellant was merely authorized to collect fees on behalf of the Airport Authority and was not the actual service provider. The Tribunal held that the liability for service tax rested with the Airport Authority, as they were the ones providing the services. Therefore, the demand for service tax on the appellant was deemed unjustified.

2. Authority to collect service tax: The appellant argued that the Airport Authority of India had directed them to collect service tax only after receiving clarification from the Central Board of Excise and Customs (CBEC). The Tribunal acknowledged that the appellant was acting as a collecting agent under the agreement with the Airport Authority and was not responsible for determining the liability for service tax. The Tribunal emphasized that the Airport Authority ultimately bore the liability for service tax and could direct the appellant to collect it. Therefore, the appellant's compliance with the Airport Authority's instructions absolved them from any penalty for non-payment of service tax.

3. Imposition of penalty: The Original Authority had imposed a penalty on the appellant for non-payment of service tax, along with demanding interest. However, the Tribunal found no justification for penalizing the appellant, especially when they were following the directions of the Airport Authority and had started collecting service tax as per the authority's instructions. The Tribunal concluded that the penalty was unwarranted, given that the appellant was not the actual service provider and was acting in accordance with the Airport Authority's directives. Consequently, the Tribunal allowed the appeal and provided consequential relief to the appellant.

In conclusion, the Tribunal ruled in favor of the appellant, holding that the liability for service tax on airport admission ticket charges rested with the Airport Authority of India, not the appellant. The Tribunal emphasized that the appellant was merely a collecting agent and was not responsible for determining or paying the service tax. The Tribunal also overturned the imposition of the penalty, considering the appellant's compliance with the Airport Authority's instructions regarding the collection of service tax.

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