2014 (6) TMI 356

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....on to booking of passage for air travel had two options for discharging his service tax liability - he could either pay service tax at the normal rate on the gross amount of commission received by him from the airlines or in the alternative, he could pay service tax under sub-Rule (7) of Rule 6 of the Service Tax Rules, 1994 at the rate specified in this sub-Rule on the basic fare. During the period of dispute, the rate prescribed under Rule 6 (7) was the 0.25% of the basic fare in the case of domestic bookings and 0.5% of the basic fare in the case of international bookings. The appellant during the period of dispute had opted to discharge service tax liability under Rule 6 (7) of the Service tax Rules. The first point of dispute is as to ....

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....vice tax as Business Auxiliary Service, this activity is not covered by any of the clauses of the definition of Business Auxiliary Service under Section 65 (19), that even the impugned order does not mention as to under which clause of the definition of Business Auxiliary Service under Section 65 (19) this activity of the appellant is covered, that as regards the cancellation charges, since in respect of cancelled tickets the appellant are not receiving any commission from the airlines who are the recipient of their services, no service tax can be charged on the same, that as regards suo moto adjustment of the service tax payment under Rule 6 (7) in respect of certain bookings for air travel on the basic fare basis in cases where the bookin....

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...., hence, the demand of service tax on this amount is not sustainable. 7. As regards, the suo moto credit of service tax paid in respect of cancellation of tickets, we find that this issue stands decided in favour of the appellant by the judgment of Hon'ble Punjab & Haryana High Court in the case of CCE & ST, Jalandhar vs. Janta Travels (P) Ltd. (supra) and, hence, the impugned order on this issue is not sustainable. 8. As regards the service tax demand on the cancellation charges, these charges are collected from the persons booking the air ticket and this is not the amount received from the appellants client  the airlines. It is not disputed that in respect of cancelled tickets, the airlines do not give any commission whatsoeve....