TaxTMI 
TaxTMI 
2019 (1) TMI 1307
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....ns 76 and 77 of the Finance Act, 1994. Aggrieved, the appellants are before this forum. 2.1 On behalf of the appellant, ld. counsel Ms. Rinky appeared and argued the matter. She submitted that the show cause notice does not give the split up of the amounts with regard to the various activities carried out by appellants. Though it is shown that an amount of Rs. 1,77,95,415/- is demanded as service tax under airport services, the appellant has collected charges for parking of aircrafts, maintenance and repair of aircrafts, hangar charges etc. The appellant has not been able to defend the allegations properly for want of details of the amounts under each category of services. The show cause notice cannot sustain as it is devoid of grounds, reasons and particulars of the demand raised. 2.2 The appellant obtained aerodrome license from DGCA in the Private Use Category and was inter alia engaged in providing Aircraft Charter services, renting of hangar for parking aircraft, aircraft upkeep services, maintenance and repair of aircraft etc. They had obtained service tax registration under BAS as well as Management, Maintenance and Repair services etc. The demand has been quantified o....
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....ry of airport services. The charges for chartering of aircrafts is liable to service tax under the category of Supply of Tangible Goods Service introduced with effect from 16.5.2008. The Board vide instructions Dy. No. 20/Comm. (ST) 2009 dated 9.2.2009 has clarified this. Thus during the disputed period, the chartering of aircraft cannot be included under the category of airport services to make it subject to levy of service tax. The activity of renting hangar is in the nature of parking facility for aircrafts and would fall more specifically under Renting of Immovable Property Services. The said services were introduced only with effect from 1.6.2007 and therefore the demand on such services would not fall under the category of airport services. The activity of maintenance of aircraft was classified by appellant under Management, Maintenance and Repair services. This is admitted by adjudicating authority at para 15 and therefore said charges cannot be included under the category of airport services. The adjudicating authority has wrongly considered the turnover for supply of spares sold by the appellant to be related to trading activity. As per the report of the jurisdictional Ass....
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....that the appellant was undertaking job work of specialized fabrication which amounts to manufacture. The demand of service tax on such charges under BAS is not maintainable. 2.6 Again, under BAS, amount received as commission from CESSNA Aircraft Co. USA, was also held to be taxable. The appellant acts as a sales representative for an aircraft company in USA and has received the commission on sale of aircrafts. Since the service is consumed outside India, the said activity would come under export of services and is not subject to levy of service tax. Further, the amount has been received in foreign convertible currency. The adjudicating authority has confirmed the demand holding that the service is accrued in India and that there is no proof that the appellant has received the amount in foreign currency. In fact, the show cause notice does not make any such allegation as to the fact that appellant has not received payment in foreign exchange. For the amount received as commission prior to 18.4.2006, no service tax is payable as per the decision of the Hon'ble Supreme Court in the case of Union of India Vs. Indian National Shipowners Association - 2010 (17) STR J57 (SC). Even if ....
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....penalties imposed under section 78 requires to be set aside as there is no suppression of facts on the part of the appellant. The counsel pointed out that the Commissioner has imposed penalty both under sections 76 and 78 which is erroneous in law. 3. The ld. AR Shri A. Cletus supported the findings in the impugned order. He submitted that the appellant is given license to run an airport. The definition of Airport Authority under section (3d) of Finance Act, 1994 provides that Airport Authority includes any person having the charge of management f an airport or a civil enclave. The appellants have charge and control of the airport and therefore their activities would fall under 'Airport Services'. The definition of 'airport services' as it stood during the relevant period includes activities such as management of airport, service provided to airlines as well as for cargo and passenger airlines, transit facilities, warehousing charges etc. The contention of the appellant that the parking charges, hangar chargers would not fall within airport service is therefore incorrect. The activities carried out by appellant at the airport has been rightly classified under airport services an....
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....on of airport services as contained in Section 65(105)(zzm) of the Finance Act. The taxable service as per this section as it stood during the period 10.9.2004 is as under:- "Taxable service means any service provided or to be provided to any person by airport authority or any person authorized by it, in an airport or civil enclave" The said section was amended with effect from 1.7.2010 and reads as follows:- "Taxable service means any services provided or to be provided to any person, by Airport authority or by any other person in any airport or civil enclave. Provided that provisions of Section 65A shall not apply to any service when the same is rendered wholly within the airport or civil enclave" 5.3 The ld. counsel has argued that the appellant not being authorized by airport authority, the activities would not fall within the definition of airport services. On perusal of the definition of airport authority, it reads as under:- Section 64 (3d) "Airports Authority" means the Airports Authority of India constituted under section 3 of the Airports Authority of India Act, 1994 (55 of 1994) and also includes any person having the charge of management of an airpo....
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....or sale of aircrafts by CESSNA, USA in India. Thus, it can be seen that the appellants were engaged in sales promotion and marketing of the aircrafts belonging to CESSNA, USA. The service recipient is situated outside India and the service is also received outside India. In the case of Commissioner of Service Tax Vs. ATE Enterprises - 2018 (8) GSTL 123 (Bom.), the facts was that the appellant therein was procuring orders and passed on to overseas manufacturers, the transaction was for procuring orders and rendering of services if any and the rendering of such service was considered to be export of service by the Bombay High Court. The decision of the Tribunal that the activity though culminates in supplies to foreign companies cannot be considered as services provided in India. The Tribunal in the case of Commissioner of Service Tax Vs. Blue Star vide Final Order dated 11.9.2018 has held that in cases of sales promotion on behalf of foreign principal, the benefit of services accrues outside India even if the activity is performed in India. For these reasons, the first limb of the requirement for export of service is satisfied. The second requirement is that the payment should be re....