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2018 (4) TMI 1045
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....he State Government for transportation of its personnel as and when required. The appellant are required to provide their own trained manpower for flying the helicopters and maintenance. For these services, the appellant, in terms of the agreement, receives some fixed amount per month based on certain minimum flying hours and also hourly charges as when the Helicopter is operated for transportation of the client's personnel by air. The period of dispute, in this case is from 2006-07 to 2008-09, during which period the appellant were not paying any Service tax in respect of their above activity. The department was of the view that during the period from 2006-07 to 2008-09, the activity of the appellant was covered under "Supply of Tangible Goods Service" taxable under Section 65 (105)(zzzzj) of the Finance Act, 1994. 3. Besides the above, the appellant during the period of dispute, had received Technical Inspection and Certification service from the Service providers situated abroad for which total payment of Rs. 89,71,685/- had been made. According to the department, since the service received from various services providers abroad was taxable service, the appellant as recipient....
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....elevant agreements explicitly state that the appellant has provided the services of non - scheduled air transportation and such activity cannot be considered as leasing or supply of helicopters since such helicopters were not supplied to the customer but were used for transporting personnel. He also relied on the following case laws- (i) King Rotors & Air Charter P. Ltd. vs. CC (ACC& Import), Mumbai - 2011 (269) ELT 343 (Tri. Mum.) (ii) Global Vectra Helicorp. Ltd. vs. CC (Import) Mumbai - 2015 (329) ELT 235 (Tri. Mum.) (iii) Business Aviation Assoc. For India vs. UOI- 2011 (24) STR 22 (Del.) (iv) Indian National Shipowners' Association vs. UOI -2009 (14) STR 289 (Bom). 8. Ld. AR appearing for the Revenue reiterated the findings of the Commissioner in the impugned order. After taking us through the various provisions of the appellant's claim, he argued that the appellant has given their helicopter to their clients on charter hire and the appellant is entitled to certain amounts irrespective of whether the helicopter was operated or not. Further, he argued that the helicopters were required to be kept in readiness at the disposal of their clien....
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.... below: "6. We have carefully considered the submissions made by both the sides. We have also perused the contracts/agreements entered into by the appellants in respect of the transaction which is under dispute. 6.1 From the preamble of the contract entered into by the appellant with M/s. ONGC, it is seen that ONGC was interested in charter hiring of helicopters for offshore operations being carried out by them and the appellant agreed to provide the required services against the Corporation‟s order in this regard. As per clause 3 of the agreement the appellant undertook to deliver/mobilize the helicopters at charterer‟s helibase in Mumbai or at other bases in India as may be designated by the charterer in fully operational condition for the charter service. In clause 4 relating to service, it was provided that the appellant shall ensure that the helicopters are available and fully operational for the exclusive use of the charterer and the persons authorized by the charterer and the daily flight schedule was to be provided by the charterer. The contract also envisaged that the appellant shall provide experienced IFR licensed aircrews for the operation ....
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....ntrol of such machinery, equipment or appliances." There is no dispute that helicopters were mobilized/delivered by the appellant to their clients without transferring the right of possession and effective control for use by the clients. Therefore, the services rendered by the appellant to their clients in respect of charter-hire of helicopters would come under the purview of supply of tangible goods for use as defined in Section 65(105)(zzzj) of the Finance Act, 1994. 6.3 The Hon‟ble Apex Court in the case of Super Poly Fabriks Ltd. v. Commissioner - [2008 (10) S.T.R. 545 (S.C.)], laid down the principle of how to read an agreement or contract as under :- "There cannot be any doubt whatsoever that a document has to be read as a whole. The purport and object with which the parties thereto entered into a contract ought to be ascertained only from the terms and conditions thereof. Neither the nomenclature of the document nor any particular activity undertaken by the parties to the contract would be decisive." If this principle is applied in reading the contracts entered into by the appellant with their clients, it is seen that the contract is for char....
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....refore, prior to introduction of entry (zzzzj), the services rendered by the members of the 1st petitioner were not taxable. Creation of new entry is not by way of amending the earlier entry. It is not a carve out of the earlier entry. Therefore, the services rendered by the members of the 1st petitioner cannot be brought to tax under that entry. .................................................................... 48. Applying the above conclusions to the instant case, we hold that the services rendered by the members of the 1st petitioner are either pre-mining or post-mining activities. They have no direct relation to mining. They were, therefore, rightly not brought to tax till entry (zzzzj) was introduced to cover transport of tangible goods by sea without transferring right of possession and effective control thereof. The services rendered by the members of the 1st petitioner are covered by entry (zzzzj) because they inter alia supply vessels, offshore support vessels, barges, tugs etc. without transferring right of possession and effective control over them. In contrast entry (zzzy) was introduced to comprehensively bring under the service tax net activities ....
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....ubmissions, this Tribunal, in the said case held as follows :- "24.6 The question now to be considered is whether the assessee used the imported helicopter for the avowed purpose. It is not in dispute that, under a "charter-hire agreement" dated 14-4-2008 with Heligo, the assessee allowed the helicopter to be used by Heligo for the purpose of mobilizing and demobilizing of personnel of third party companies and for movement of their freight and/or equipment. Under the agreement, Heligo would reimburse the actual costs incurred by the assessee in sourcing and acquiring spares for maintenance of the helicopter. The necessary infrastructure for maintenance of the helicopter would also be provided by Heligo. The entire cost of insurance to cover all liabilities in respect of passengers, cargo, crew, helicopter and third party would be incurred by the assessee and reimbursed to them by Heligo. Heligo would also pay monthly remuneration to the pilots of the assessee. They would also bear the costs of maintenance of the helicopter and also the costs of fuel and consumables required for its operation. On a perusal of the charter-hire agreement between the assessee and Heligo, we f....
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....led passenger services" has been defined in clause (b) of Explanation to condition No. 104 and the same means "air transport services other than scheduled (passenger) air transport services as defined in Rule 3 of the Aircraft Rules, 1937." [Incidentally, we note that the expression "non-scheduled air transport services (passenger)" is defined in the same way in clause (2) of "Passenger CAR"] "Scheduled air transport service" has been defined under Rule 3(49) of the Aircraft Rules, 1937 and the same reads as under :- "Scheduled air transport service" means air transport service undertaken between the same two or more places and operated according to a published time table or with flights so regular or frequent that they constitute a recognisably systematic series, each flight being open to use by members of the public, "[underlining added] The learned counsel for the appellants has argued that two distinct requirements have to be satisfied by an air transport service to be called "scheduled air transport service". According to him, the two essential requirements are the following : (a) there must be regular or frequent flights or flights operated according to a pu....
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....pellants that they used the helicopter for public transport of passengers. They only allowed Heligo to hire the aircraft for a remuneration and use it for transporting employees of Oil & Gas/allied companies between Vishakapatnam airport and offshore oil/gas fields under contracts awarded to Heligo by those companies. The appellants were unable to use the copter (during the tenure of the agreement) for any other purpose without the prior consent of Heligo. They did not have any control over the manner in which the helicopter was used by Heligo (who professedly entered into charter contracts with "third party companies" in respect of the aircraft which was accordingly used for transporting the personnel of these companies) and the copter operations were not open to members of the public. Where the helicopter would not come within the meaning of "passenger aircraft", the flight operations cannot be called "non-scheduled (passenger) services". The ratio of the above decision would apply squarely to the facts of the case before us. As can be seen, the service provided by the appellant cannot be covered by transport of passengers by air service since in that case, the def....