TaxTMI 
TaxTMI 
2008 (8) TMI 52
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....th the PTOs, provide to the clients of the PTOs i.e. foreign tourist - (a) the service of transport in tourists vehicles without any supplementary services like guide services, monument visit services, porter's services, food services, general assistance services etc.; and (b) services of transport in tourist vehicles alongwith the above mentioned supplementary services. 1.1 The Appellant while providing the above services to the foreign tourists, get the payment from the PTOs against the bills raised by them. However, they raised the bills only for the transport services and for the supplementary services debit notes are raised. There is no dispute about the liability to service tax of the amount being received by the Appellant for organizing transport of the tourists in tourists vehicles and the Appellants are paying the service tax on the amount received from the PTOs for this service. The point of dispute is as to whether the amount being received by the Appellant from the PTOs for the supplementary services would also be liable to service tax. According to Revenue, the Appellant have to pay Service Tax on the gross amount being received by them f....
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.... services, porter services, food services, general assistant services etc. The Appellant while providing the supplementary services on behalf of the PTOs, get the reimbursement for the expenses on these service from the PTOs on actual basis. Charging service tax on the supplementary services would, therefore, amount to taxing the same services twice. (3) The Commissioner in the impugned order has relied upon the Board's Circular No. 96/7/07 dated 23/8/07 for the purpose of levying service tax on the Appellant on the ground that the Appellant is a sub-contractor/sub-agent. As per this circular, a sub contractor is essentially a taxable service provider and the fact that the services provided by such sub-contractor are used by the main services provider for completion of his work, does not in any way alter the fact of provision of taxable service by the sub-contractor. This circular had been issued by the Department only in 23/8/07, whereas the period of dispute in this case is 01/4/02 to 31/3/07. Looking from another perception, it could be said that during the period of dispute, there was no clarity on the issue of liability of sub-contractor to service tax and in view....
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....ourt in case of Pahwa Chemicals Private Ltd. vs. Commissioner - 2005 (189) E.L.T, 257 (S.C.) has held that mere failure to declare something does not amount to mis-declaration or wilful suppression of facts and that for proving mis-declaration, and wilful suppression of facts, some positive action on the part of the assessee is a must. In this case, the Appellant did not know about service tax liability in respect of supplementary services and they were under genuine impression that these supplementary services were not covered by the definition of tour operator service. For the same reason no penalty is imposable on the Appellant under Section 78. (7) As held by the Hon'ble Supreme Court in case of Hindustan Steel Ltd. vs. State of Orissa - 1978 (2) E.L.T. J 159 (S.C.) penalty could not be imposed simply because there is default. For imposition of penalty presence of mens-rea is a must. 2.2 Shri Amit Jain, the learned Departmental Representative, made the following submissions :- (1) During the period from 10/09/04, as per the definition of "tour operator" given under Section 65 (115) of the Act this covered any person engaged in business of planning, scheduling, orga....
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.... services i.e. the services of providing guide services, monument visit services, porter services, food services, general assistance services etc. in connection with tours is covered by the definition of "tour operator's" service and whether the amount received by the Appellant for the supplementary services is liable to service tax. The period of dispute in this case from 01/4/02 to 31/03/07 and the same can be divided into two parts from 01/4/02 to 09/9/04 and from 10/9/04 to 31/03/07. During the period from 10/9/04 onwards the definition of "tour operator" as given in Section 65 (115) of the Act has been amended and as per the amended definition the "tour operator" means "any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sight seeing or similar services) by any mode of transport and includes any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under Motor Vehicle Act, 1988 or the Rules made thereunder. Since for this period, the definition of "tour operator" itself covers the activities like arranging accommodation, sight seeing or simi....
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....e of the expression "services provided in relation to use of Mandap in any manner" has observed that the phrase - "in relation to" has been construed by this court to be of widest amplitude. We also find that when the tour operator service had been brought within the purview of service tax in the year 1997, the tax research unit of the Central Board of Excise and Customs vide Circular No. 43/10/97-TRU dated 22/08/97 had explained the scope of this service as under:- "the services rendered by the tour operator may be only for providing transport service within or outside the town, city or its territorial limits. The services rendered by the tour operators may only be limited to providing transport service in relation to a tour or it may also include host of other services as in case of package tour. The services provided by such a tour operator may also include, apart from providing the basic service of transportation from one place to another, services of providing boarding and lodging arrangement, local sight seeing, guide services and wide range of other value added services provided by tour operators such as providing for porters, booking of accommodation, arranging the visit....