TaxTMI 
TaxTMI 
2017 (6) TMI 1072
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....e alleged that the appellants failed to pay service tax on the correct value of taxable services rendered by them and accordingly a demand of Rs. 1,10,86,130/- was made against the appellant. Proposals were also made for imposition of penalties under Section 76, 77 and 78 of Finance Act, 1994, for various violations of the provision of the Act. The appellants filed their defence reply and were represented during the personal hearing conducted by the Original Authority. The case was adjudicated by the Commissioner (Adjudication), Service Tax, New Delhi vide his order dated 01/10/2009. The Commissioner confirmed a demand of Rs. 72,33,753/- towards service tax and cess, short paid by the appellant during the impugned period. He also imposed penalty of Rs. 1,000/- under Section 77 and penalty of equivalent to service tax confirmed, under Section 78 of the Act. 2. The appellants preferred appeal against the said original order. The appeal was decided by the Tribunal vide final order No.52422 of 2016 dated 08/07/2016. The Tribunal remanded the case to the primary Adjudicating Authority for denovo adjudication with the following directions/findings :- "(i) The demand pertaining to the ....
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....2017. The learned Counsel for the appellant as well as the learned AR for the Revenue eloberated their side of the case and submitted written notes also. The following are the main points canvassed by the appellants :- (a) the Adjudicating Authority had recorded incorrect facts regarding various correspondence between the appellant and the Department. He did not record crucial facts regarding appellant's own voluntary action of amendment of service tax registration on 03/05/2006 itself. Various correspondence which are on record from May 2006 onwards will clearly establish that the appellants were in regular communication with the Jurisdictional officer and the aviation industry as a whole was also engaged with the CBEC for clarification of various disputed issues on their service tax liability; (b) the service tax liability of the appellant was contested on the ground that the appellants are having permanent establishment in Japan and tax liability, if any, should be paid by the Indian recipient of service only. (c) No service tax is payable on the consideration attributable to return journey. (d) When no penalty was imposed under Section 76, the observation of the Tribunal ....
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....d to by both the sides. 7. On careful consideration of appeal papers, the final order dated 08/07/2016, grounds of appeal by the appellant and the miscellaneous application filed for rectification of error, we find that there are three points central to the dispute at hand : (a) the includability of various charges received as consideration by the appellant from passengers, in the valuation for service tax purpose under the category of "transport of passengers embarking in India of International journey by air service". This issue involved legal interpretation of taxable service and value of such taxable service in terms of Section 67 of the Finance Act, 1994. The Tribunal vide the final order dated 08/07/2016 examined 20 components of charges received by the appellant for issuing air travel ticket. After detailed examination of the legal principles and binding precedents of the Tribunal's earlier decisions the Tribunal concluded that out of charges listed from I to XX Sl. Nos. V to XX are not liable to be included in the taxable consideration. This issue has been settled by the Tribunal in the said final order and on close scrutiny of the finding, we note no apparent error on re....
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....sought detailed procedure for charging service tax including the factor/taxes which are excludable from the total value of the ticket while calculating the service tax liability 5 30.08.2006 The Appellant replied to the letter dated 10.08.2006 and specifically informed that only basic fare is taken into account while calculating the service tax. The Department never informed to the Appellant that the practice adopted by it is not correct. 6 25.10.2006 First Return (ST-3) for the period May 2006 to September 2006 was filed with in time. 7 09.04.2007 The Department referring to earlier letter dated 17.08.2006 admitted that "contents of your letters have been noted", thus admitted that the Appellant replied to letter dated 10/17.08.2006 through letter dated 30.08.2006. 8 25.04.2007 Return (ST-3) for the period from October 2006 to March 2007 was filed within time. 9 29/30.08.2007 The Commissioner Service Tax sought details of various charges etc. and admitted that a meeting has been called on 10.09.2007 with all airlines about "to discuss the issue related to levy of service tax on airline." Thus, the issue was an industry issues and well known to the Department and the....
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.... were not recorded in the final order of the Tribunal. It is submitted that the appellants are a registered company in Japan having permanent establishment there and, hence, not liable to service tax in India. Service tax, if any, is to be discharged by the recipient of service in India in terms of Section 66A. We note that the said claim is devoid of merit. Section 66A, Explanation I, clearly states that a person carrying on a business through a branch or agency in any country shall be treated as having a business establishment in that country. The appellants are having a business establishment (branch) in India and, as such, are liable to service tax in respect of taxable services rendered by them. Another issue was also raised regarding non-tax liability on return fare of the passengers. We note that the transport of passengers embarking in India for international journey by air is a service, taxed in terms of Section 65 (105) (zzzo) of the Finance Act, 1994. The said tax entry talks about passenger embarking in India for international journey. If the ticket is issued for a round trip/return journey also then apparently it is a total value of the such service which is to be cons....