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2023 (10) TMI 811
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....ce tax by invoking the extended period of limitation contemplated under the proviso of the section 73(1) of the Finance Act, 1994 [the Finance Act] with interest and penalties. 3. Japan Airlines Company Limited [Japan Airlines] is a Japan Carrier Airlines with its permanent place of business in Japan. The appellant claims to be registered in India as a 'project office' of Japan Airlines and had obtained service tax registration under the category of 'transport of passengers embarking in India for international journey by air services'. The appellant also obtained permission from the Reserve Bank of India under section 32 of the Foreign Exchange Regulation Act, 1973. 4. The appellant contends that it undertakes booking of airline tickets for customers and receives consideration for the same in rupees, and on such bookings the appellant discharges service tax liability. However, in certain situations, airline tickets for journeys commencing in India are booked from offices of 'Japan Airlines' located outside India. According to the appellant, such bookings are directly made by the Japan Airlines located in Tokyo or other project/ branch offices located in different countries, b....
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....ereas the Superintendent Service Tax (Audit) vide letter of even no. 28283 & 2247 dated 08.12.2009 & 22.01.2010 respectively (Collective RUD-I) sought the following information: (i) xxxxxxxx (ii) xxxxxxxx (iii) Details of ticket booked from abroad for journey starting from India with effect from 01.05.2006. Amount of fare collected Amount of Service Tax (Year wise). (iv) xxxxxxxx (v) xxxxxxxx 3. On the basis of the information obtained from the party during audit and subsequently, a demand was raised on the following issues: Xxxxxxx d. The present issue under this show cause notice is with respect to demand for point No. (ili) above, i.e. ticket booked from the office of Japan Airlines not located in India, abroad for journey starting from India. 4. xxxxxxxx 5. xxxxxxxx 6. xxxxxxxx A Summon under Section-14 of Central Excise Act, 1944 of even no. 24031 dated 10.09.2010 Under C No. DL/ST/AE/Gr. 5(2)/Inq/110/2010 (RUD-IV) was therefore, issued to the party, inter alia, asking for the details of ticket booked from abroad for journey starting from India w. e. f. 01.05.2006 (Amount of fare....
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....)/Inq/110 /2010/Pt.1 for month wise quantification detail of amount deposited in relation to passengers embarking from India for International Journey from February, 2010 onwards. In response to the aforesaid letter dated 11.08.2015, the party vide letter dated 28.08.2015(RUD-XII) informed that they have received another letter from Superintendent, R-1, Service Tax, Division-I, Nehru Place, New Delhi-110 019 in relation to month-wise details of Service Tax deposited with details of interest which was duly replied by them vide letter dated 23.06.2015. However, the party in their letter dated 28.08.2015 (RUD-XII to SCN) neither provided the quantification details regarding tickets booked from abroad for passengers embarking journey from India nor enclosed the quantification details submitted to the Range office. Therefore, another reminder of even no. 9042 dated 27.08.2015 was issued to the party. 12. The party vide their letter dated 04.09.2015 (RUDXIII) enclosing therewith a Calculation sheet, addressed to Hon'ble Revenue Secretary, Ministry of Finance, received in this office on 14.09.2015, wherein the party again contended that they had voluntarily deposited Service ....
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.... for providing such taxable service. (emphasis supplied) 9. The show cause notice, accordingly, called upon the appellant to show cause as to why service tax amounting to Rs. 13.9 crores should not be demanded and recovered; the amount of service tax of Rs. 7.48 crores paid by the appellant should not be appropriated; and why penalty and interest should not be charged. 10. The appellant submitted a detailed reply to the show cause notice pointing out that there was no shortfall in payment of service tax and the relevant portion of the reply is reproduced below: "That the Department in paragraph 14 it is alleged that one comparison of the figure given in computation sheet submitted by the Notice and actual payment it was found that there is a short payment of service tax, which is wrong. The Department itself has mentioned figure "Rs." 13,93,06,059/- whereas the Noticee clearly mentioned "JPY" (which is international standard of Japan Yen Currency) and nowhere mentioned "Rs." Thus, figure mentioned in Japan Yen, but the Department has shown is at in Rupees that is why they have reflected this as a difference whereas there is no difference exist as an band of the sa....
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.... they had provided the figures in Japanese Yen (JPY) with reference to their correspondence made with the Department. At the outset, I find that the worksheet provided itself indicates that the amounts are categorized under heading "JN Tax collected outside India" collectively amounting to Rs. 13,93,06,059/-, However, the Noticee failed to provide complete and appropriate information as per their own contention even though they had provided taxable services and collected value of such services along with Service Tax on such values. It is also admitted that the tickets must have been booked from various destinations outside India this involving various foreign exchange currency and therefore, it is not the case that they had collected such values and taxes in only JPY. Moreover, there is nothing on record about the specific rate of foreign exchange currency as applicable during the disputed period and the rate of Service Tax as applicable over the period. Hence, by merely giving the consolidated figures for the entire period i.e. from February, 2010 till January, 2015 and computing the figures by dividing the same by 1.86 collectively and uniformly does not substantiate their claim ....
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....e plea of the noticee is not tenable regarding the contention that the amounts were mentioned in JPY in the worksheet submitted by them. 12. Ms. Shagun Arora, learned counsel for the appellant assisted by Mr. Kunal Agarwal made the following submissions: i) While providing the details of tickets booked by the foreign offices for passengers embarking their journey from India, a computation was provided in JPY (Japan Currency) and not in INR and while making the payment of service tax to the department the appellant converted the total amount of JPY 13,93,06,059/- to INR and paid Rs. 11,19,02,550/- towards service tax in interest, but the show cause notice and the impugned order have failed to notice this aspect. Learned counsel submitted that there was no shortfall in the amount of service tax paid by the appellant; and ii) No service tax is payable on the tickets booked outside from India and in any case the appellant is not a service provider and, therefore, cannot be made liable to pay service tax. 13. Shri Rohit Issar, learned authorized representative appearing for the department has however supported the order and has submitted that the findings recorde....
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....12.36 JPY Rate of Conversion (As per Reserve Bank of India) 1.86 INR 11,19,02,540.00 11,19,02,550.00 19. This position was explained to the department by the appellant in reply to the show cause notice. The appellant clearly explained that the figures were mentioned in JPY, but the department had shown in to be in Rupees and that is why the balance amount was demanded. If the amount in JPY is converted into Rupees by dividing it by 1.86, which was the prevalent rate of exchange, the amount would actually come to 11,19,02,540/- in Indian rupees. The appellant had, for this reason, explained that there was no shortfall at all. 20. It was this issue that was required to be examined by the Commissioner, as is clear from paragraph 35.2 of the order which has been reproduced above. The Commissioner, instead of examining this issue, went on to observe 'that the tickets must have been booked from various destinations outside India, thus involving various foreign exchange currencies and therefore it is not the case that they had collected such values and taxes only in JPY. The Commissioner t....