TaxTMI 
TaxTMI 
2022 (10) TMI 9
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...., and as pointed out by Learned Authorised Representative, the impugned order makes no mention of recovery under section 75 of Finance Act, 1994 in the operative portion despite recording that '33. .... As regards the interest, it is seen that section 75 speaks for automatic recovery of interest in case of confirmation of short levy under section 73. This view has been confirmed by the Hon'ble SC in the case of KERALA STATE ELECTRICITY BOARD 2008 (9) STR 3 (SC). The Hon'ble SC examined the provisions of the including section 75 providing for charging of interest and held that person liable to pay tax is also liable to pay interest. Since the assessee is liable to pay Service Tax, they are also liable to pay interest on the 'the short paid amount of service tax in terms of section 75 of the Act ibid.' 2. It would therefore appear that the absence of a specific order of recovery of interest under section 75 of Finance Act, 1994 is oversight on the part of the adjudicating authority and this cause of grievance to the appellant-Commissioner may, for the moment, be placed on the backburner while the essential issue of taxability, as agitated by the appellant-assessee, is taken up....
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.... provided by a tour operator located in India to recipient, who is also located in India, for planning, scheduling and organising in relation to a tour outside India (outbound tourism) would be taxable under the category of "tour operator service".... ' to confirm recovery of Rs. 42,73,884, Rs. 18,14,672, Rs. 9,54,113 and Rs. 5,67,189 respectively for 2004-05 to 2008-09 in the first notice and for each financial year thereafter. 6. Drawing attention to the written submissions filed on behalf of Revenue pointing out that the first of the two components of the demand in dispute is no longer res integra, owing to the decisions of the Tribunal in Torrent Pharmaceuticals Limited vs. Commissioner of Service Tax, Ahmedabad [2014 (12) TMI 41-CESTAT AHMEDABAD], in Tech Mahindra Ltd & another vs. Commissioner of Central Excise, Pune-I [2016 (9) TMI 191-CESTAT MUMBAI], in Kusum Healthcare Pvt Ltd vs. Commissioner of Central Excise, Jaipur-I [2018 (2) TMI 1408-CESTAT NEW DELHI], in Kusum Healthcare Pvt Ltd vs. Commissioner of Central Excise & Service Tax, Alwar [2021 (10) TMI 229-CESTAT NEW DELHI] and in Cades Digitech Pvt Ltd vs. Commissioner of Central Tax, Bangalore North [2022 (1) TMI 31....
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....rovide an avenue for escapement, either overtly or covertly, from the enforcement of the levy on the 'taxable event'; concomitantly, the deemed demutualization does not demonstrate legislative intent to tax transactions that are normal to such dependent existence. 9. It was, therefore concluded that '24. Hence, the legislative intent of this legal fiction may have to be ascertained. In doing so, the goals of the appellant as an exporter cannot be far from our mind. 25. Section 66A requires taxing of taxable services rendered by an overseas branch to its head office and the two sets of Rules limit tax demand only to the extent that these services are received in India in relation to business or commerce. A plain reading would make it apparent that the services referred to must be for pursuit of business or commerce in India. The two sets of Rules provide for availment of Cenvat credit of the tax paid by the Indian entity on 'reverse charge basis.' As an exporter, the Indian entity is entitled to claim refund of taxes lying unutilized in Cenvat credit account. There is no dispute that the activities of the branch are in connection with the export activity of the appellant-asses....
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....e head office. Its mortality is entirely contingent upon the will and pleasure of the head office. The transfer of funds - by gross outflow or by netted inflow - is, therefore, nothing but reimbursements and taxing of such reimbursement would amount to taxing of transfer of funds which is not contemplated by Finance Act, 1994 whether before 2012 or after.' 8. The present dispute, insofar as it concerns the period up to March 2012, leaves no room for doubt of being covered by the decision supra and, consequently, negates the confirmation of the demand arising therefrom in the impugned order. 9. The issue remaining for resolution is the scope of the expanded definition of section 65(115) of Finance Act, 1994 impacting the activities of the appellant in relation to foreign travel undertaken by the customers during the disputed period. According to Learned Counsel, this is also no longer res integra as the impugned activity has been held to be beyond the pale of taxation by the Tribunal in Cox & Kings India Ltd vs. Commissioner of Service Tax, Delhi [2014 (35) STR 817 (Tri.Del)] and the special leave petition of Revenue before the Hon'ble Supreme Court was dismissed. He further submi....
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....s view is based on that fact that the service provider and service receiver, both, are located in India and the service flows within the country. Accordingly, the place of supply of service is India, and hence, the service is taxable." Therefore, a direct clarification has been provided by the CBEC in case of "outbound tours1 as per the statutory provisions in force Further, the Hon'ble Supreme Court in number of decisions has held that clarifications/ instructions issued by the Board are binding on the Department but the same are not binding on courts or quasi-judiciary authorities. The adjudication proceedings conducted herein under by me are in the capacity of quasi-judiciary authority and the clarifications/ instructions issued by the Board are not binding in the instant circumstances. However, I find that the aforesaid clarification given by the Board is as per the Service Tax Rules & Regulations in force at the relevant period of dispute and not contrary to the any Notification issued and thus applicable in the current circumstances. Therefore, I am of the considered opinion that "outbound tours" are well covered under the ambit of service tax w.e.f. 10.09.2004 by the ....
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.... of outbound tours performed by the Indian tourists as the consideration for the same has been received in Indian rupees. Further, as regards the taxability of foreign tourists , as already discussed, the assessee has provided services of planning, scheduling, organizing or arranging tours (when may include arrangements for accommodation, sightseeing or other similar services) to the foreign tourists within India since at the time of the provision of aforesaid service the service provider and the service recipient, both were in India and the service also flew within the country and so the place of supply of service remained in India and hence the services provided by them within India are well covered under 'Tour Operator service'. I find that it is a fact that the definition of the term 'Tour Operator' as amended vide Finance Act, 2004 has two parts as under; "tour operator" means 1. any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing- or other similar services) by any mode of transport, 2. and includes any person engaged in the business of operating tours in ....
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.... that interpretation as the cause of action in Indian Association of Tour Operators was the restrictive definition of exports in comparison with the previous period, when it was indubitably activity rendered outside India, and the restriction imposed thereafter was challenged for being ultra vires. It is for that reason that the judgment went on to hold that '15. The resultant position, prior to 1st July, 2012, as far as export of tour operator services was that even if a part thereof was performed outside India and the remaining in India, it would still be treated as having been performed outside India and thereby be construed as an export of service. Such export of tour operator service was not exigible to Service Tax. This position continued till 1st July, 2012.' with emphasis on the non-taxability thereof owing to not having been performed entirely in India. That, in our view, is the test that the activity of the appellant-assessee must be held as having failed for the demand to succeed. It is contended by Learned Counsel that impugned order has not touched upon that aspect and has merely cited the expanded definition of section 65(115) of Finance Act, 1994 with reference t....
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....les, 2005. I find that rule 3(2) of the Export of Services Rules, 2005 has laid down the condition of receipt of the consideration in foreign currency whereas this condition has not been fulfilled in respect of outbound tours performed by the Indian tourists as the consideration for the same has been received in Indian rupees. Further, as regards the taxability of foreign tourists , as already discussed, the assessee has provided services of planning, scheduling, organizing or arranging tours (when may include arrangements for accommodation, sightseeing or other similar services) to the foreign tourists within India since at the time of the provision of aforesaid service the service provider and the service recipient, both were in India and the service also flew within the country and so the place of supply of service remained in India and hence the services provided by them within India are well covered under 'Tour Operator service'. I find that it is a fact that the definition of the term 'Tour Operator' as amended vide Finance Act, 2004 has two parts as under; "tour operator" means 3. any person engaged in the business of planning, scheduling, organizing or....