TaxTMI 
TaxTMI 
TaxTMI 
2011 (11) TMI 264
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....penalties under different section in Finance Act, 1994 also were proposed. 2. The SCN was adjudicated by confirming the tax demanded along with interest and imposing penalties under sections 76 and 78 of the Finance Act, 1994. Aggrieved by the order the Appellant filed appeal with the Commissioner (Appeal) who rejected their appeal. Aggrieved by this order the Appellants have filed this appeal before the Tribunal. 3. The Appellant submits that they were operating buses for transporting passengers from one destination to another where the passenger does not determine the time of departure or destination of the bus. The passenger can travel from any point on its route to any other point on the route. That is to say they are contending that their buses were operating as stage carriers as defined in Motor Vehicles Act, 1988 and they were not conducting tours as defined in Finance Act, 1994. According to them a vehicle can be considered to be operating a tour when the vehicle as a whole is contracted to a party. Para B.1 from the statement of Facts and Events in the Appeal Memorandum is reproduced below: "B.1 If your Honour kindly observe business it can be seen that we are not engag....
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....he two boarding points of the ropeways was not a tour. The observations in para 7 of the order are relevant which are reproduced below. "7. The levy for service tax is on service provided 'in relation to tour'. Therefore, the question to be asked is which is the tour in question. Undisputedly, the pilgrim's progress is from Hardwar to the temples in question. Therefore, if there is a tour, it is the pilgrimage to the two temples. There cannot be a tour between two boarding points of a transport hub. The transit is merely incidental to the tour. The absurdity of the contrary view is clear upon applying it to everyday transit links between road and rail stations, domestic and international terminals of an airport etc. We do not see the statutory definition of 'tour' conferring an entirely artificial meaning on the commonly understood word, 'tour'. The words 'irrespective of distance' in the definition of tour only means there could be no argument that tour should be to a distant place. If distance is taken as a criterion, an intractable situation would arise, with by each person contending as to what should be the minimum distance. The law seeks only to remove such ambiguity. It doe....
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....t, and includes any person engaged in the business of operating tours in a tourist vehicle or a contract carriage by whatever name called, covered by a permit, other than a stage carriage permit, granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made thereunder. Explanation - for the purposes of this clause, the expression "tour" does not include a journey organised or arranged for use by an educational body, other than a commercial training or coaching centre, imparting skill or knowledge or lessons on any subject or field)" 9. The Ld. SDR points out that the Appellant does not have permit under Motor Vehicles Act and Rules made thereunder to operate as a "stage carrier". They were conducting the activity using vehicles having Tourist Permits. He submits that even if the Appellant was operating under any other permit he would have been covered under the definition of tour operator. He relies on the decision of Madras High Court in the case of Secretary, Federation of Bus Operators Association of Tamil Nadu v. Union of India [2007] 6 STT 49 (Mad.). In particular he relies on paras 41 and 55 of the order which are reproduced below: "41. We have already rejected....
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....is case. In that case the tour organised by the operator was a tour by ropeways which was not taxable. As a part of such tour there was a transit between two points by road. The Tribunal decided that the transit between two points by road by itself is not a tour. However the principles pressed into service is very relevant for deciding the matter at hand. The Tribunal held that the word "tour" has to be understood by its natural meaning first and then the definition given in the act applied on the natural meaning rathe than going by only the words used in the definition. Under this approach the Tribunal held that the tour in that case was the tour operated using rope-ways which was not taxable. While giving the decision the Tribunal relied on the decision of the Tribunal - Zee Telefilims Ltd. v. CCE [2006] 5 STT 182 (Mum. - CESTAT) in interpret the scope of the services of "Advertising Agency". This decision in turn relied on a few other decisions out of which the decision of the Supreme Court in Hari Prasad Shivshankar Shukla v. A.D. Divikar - AIR 1957 SC 121 can be particularly demonstrating the principle. 11. The argument raised is that if the word "tour" is understood in its n....
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....ot operating as stage carrier because he was not licensed to operate so but was operating as a Tourist Operator for which he was licensed. Illustration (e) of the said section is relevant to the context. It is proper to presume that the Road Transport Authorities were conducting the necessary checks to ensure that the Appellant was acting as Tourist Operator only and not as a stage carrier. 15. We have also considered the argument that any vehicle as a whole was not given on contract to anybody and for the reason they could not have been operating tours. Going by this reason a vehicle operating usual conducted tours within a city or from one city like Delhi to another like Agra also cannot be considered to be operating "tour". In such tours also the buses operate in a route decided by the operator and a participant can get off at any point. Still such programmes are considered as "tours". 16.1 The Appellant has contended that the extended period of limitation of 5 years cannot be invoked in this case. The Appellant argues that the SCN is issued by department a long time after knowing the facts. They refer to notice Dated 28-08-2000 issued by Department for collection of service t....
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.... of all dues within 30 days of the order was introduced with effect from 14-05-2003. The Adjudication order was issued on 29-08-2003. The option as per this proviso is not extended in the adjudication order. The Delhi High Court has held in the case of K.P. Pouches (P.) Ltd. v. Union of India 2008 (228) ELT 31 (Delhi) held that such option can be given by higher authorities if not given in the adjudication order. So we give such option. 18. Thus the Appeal filed by the Appellant is partially allowed only in respect of penalties involved. Archana Wadhwa, Judicial Member 19. After going through the order proposed by my learned brother Member (Technical), I proceed to record a separate order. 20. It is seen that the period involved in the present appeal is from 1.9.1997 to 17.8.1998 and from 1.4.2000 to 23.12.2002. The order proposed by learned Member (Technical) has confirmed the entire demand of ST of Rs. 19,30,935 while upholding the penalty of Rs. 41,81,270 imposed under Sections 76 and 78 of the Finance Act, 1994. While agreeing with the finding arrived at by learned Member (Technical) that service tax for the period September, 1997 to 17.8.98 is required to be confirmed on t....
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....ranted from the whole of the ST leviable under Section 65(n)(105) of the Finance Act in respect of taxable services provided by a tour operators for entire inter-State or intra-State transportation of passengers. Circular No. 334/13/09-TRU, dated 6.7.09 clarified the scope of said notification as under :- "6.1 Private bus operators, who operate bus on specific inter-State or intra-State routes, are required to pay service tax as they ply their buses having 'contract carriage permits' and thus fall within the definition of tour operators. On the other hand the State Undertakings run buses, which run on the same route carrying passengers, are not subjected to service tax as these buses bear 'stage carriage permit'. In order to bring parity between the two, the services provided by the tour operators undertaking point to point transportation of passengers in a vehicle bearing contract carriage permit is being fully exempted from service tax, provided such transportation is not in relation to tourism or conducted tours, or charter or hire. (Notification No. 20/2009 -ST dated 7.7.2009 refers)." In terms of the above clarification read with notification, services provided by the tour o....
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.... service tax confirmed for the period 1.4.2000 to 23.12.2002 is required to be set aside along with setting aside of penalty imposed upon the appellants for non-payment of service tax during the said period. 25. As regards the penalties imposed under Sections 76 and 78 of the Finance Act (for the period 1.9.97 to 17.8.98) I find from the order proposed by my learned brother the observation to the effect that Section 78 prescribes minimum penalty equal to tax evaded and maximum penalty equal to twice the tax evaded. He has extended the benefit of reduced penalty to the appellant equivalent to 25% of the duty demanded, subject to payment of all the dues within 30 days of the order. I however, feel that the issue during the relevant period was not free from doubt as is clear from the various Tribunal's order quoted in the order proposed by learned Member (Technical). Further, the fact that the notification was issued giving retrospective exemption and clarifications on the issue from time to time, itself is indicative of the fact that the legal dispute involved interpretation of provisions of definition of tour operators and was not free from doubt. In such a scenario, no mala fide c....