Tour Operator Service requires active tour planning; Airport Service requires airport authorization, so both contested service tax demands denied.

Sale of bundled promotional tour packages that do not involve active planning, scheduling, organising or arranging of tours does not meet the statutory Tour Operator Service definition; consequence: no service tax under that category though tax earlier collected under abatement is not refundable. Services rendered to a subsidiary for the period before the 01.07.2010 amendment do not qualify as Airport Service because the provider lacked authorization by the airport authority; consequence: no airport-service tax liability for that period. Both contested demands, interest and penalties were vacated and the appeal was allowed.

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Issues: (i) Whether the appellant's sale of promotional "tour packages" falls within the definition of "tour operator service" under Section 65(115)/Section 65(105)(n) of the Finance Act, 1994; (ii) Whether the services provided by the appellant to its subsidiary qualify as "Airport Service" under Section 65(105)(zzm) of the Finance Act, 1994 for the period prior to 01.07.2010.

Issue (i): Whether the appellant's tour packages constitute taxable "tour operator service".

Analysis: The tour operator definition requires engagement in planning, scheduling, organising or arranging tours or operating tours in a tourist vehicle; the appellant's packages comprise bundled travel and ancillary features without undertaking planning, scheduling or organising tours on behalf of passengers. The Tribunal's prior decision in the appellant's own case and the Jet Airways decisions hold that similar airline-offered packages do not meet the statutory criteria for tour operator services. Notification No. 01/2006-S.T. provides abatement for tour operator services but does not alter the scope of the statutory definition.

Conclusion: The appellant's tour packages do not fall within "tour operator service" and no service tax liability arises under that category; however, the tax collected earlier under abatement is not refundable.

Issue (ii): Whether services rendered to the appellant's subsidiary qualify as "Airport Service" for the period prior to 01.07.2010.

Analysis: The pre-01.07.2010 definition of Airport Service required that services be provided by an airport authority or by a person authorized by the airport authority to provide services on its behalf. The appellant was not authorized by the airport authority to provide services on behalf of the authority; D.O.F. No. 334/1/2010-TRU explains that the authorization requirement existed prior to the amendment effective 01.07.2010 and was removed thereafter. Tribunal precedent (Soft Touch Aviation) similarly found absence of authorization precluded classification as Airport Service for the pre-amendment period.

Conclusion: The services in question do not qualify as "Airport Service" for the relevant period prior to 01.07.2010 and no service tax liability arises under that category.

Final Conclusion: Both contested categories of service tax demand (tour operator service and airport service) are set aside, the confirmed demands, interest and penalties are vacated, and the appeal is allowed.

Ratio Decidendi: For the pre-amendment period, a taxable "tour operator service" requires active planning, scheduling, organising or arranging of tours as defined in Section 65(115) of the Finance Act, 1994, and a taxable "Airport Service" requires services rendered by the airport authority or by a person authorised by the airport authority to provide services on its behalf; absence of these statutory elements precludes classification as the respective taxable services.

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