TaxTMI 
TaxTMI 
2024 (1) TMI 1119
X X X X Extracts X X X X
X X X X Extracts X X X X
....the intelligence gathered, the Department found that the appellant had deliberately manipulated their books of account and not reflected the actual income earned as commission amount received from General Sales Agent (GSA) and and also the incentives received from the airlines. Accordingly, show cause notice dated 18.10.2011 was issued to the appellant for demand of service tax amounting to Rs.32,02,972/- under "Business Auxiliary Services" (BAS) along with interest under Section 75 and penalty under Section 76, 77 and 78 of the Finance Act, 1994. The Adjudicating Authority vide order dated 30.03.2013 confirmed the demand of Rs.29,06,914/- under Section 73(1) and amount of Rs.2,96,057/- received in the name of Ticket Cancellation Charges, Voiding Charges, Refund Administrative Fee (RAF) and Air Transaction Fee was dropped. The appeal filed by the appellant was dismissed by the impugned order and hence the present appeal has been filed challenging the same before this Tribunal. 4. The learned Counsel for the appellant has challenged the confirmation of demand of service tax under the category of BAS on the following income: "6.1 Amount received from Airlines (a) Airline Incent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....al has held that the activity in question is not taxable under the head, "Business Auxiliary Service" but is covered under the category of "Air Travel Agent" service. On the commissions received from other than the airlines, i.e., from other travel agency or GSA. The Tribunal has already held that commission received for Booking of ticket from other agents is not taxable under BAS and relied on the order passed in their own case titled as M/s Akbar Travels of India Pvt. Ltd. - 2019 (22) GSTL 427 relying on the decision in M/s Zuari Travel Corporation - 2013 (7) TMI 911 - CESTAT-Mumbai. Similarly, for the commission received from other branches, the learned counsel submitted that the transaction here does not involve two separate entities in terms of definition of taxable service which requires existence of a service provider and a service receiver whereas the appellant and the branches are one and the same entity. On the contrary, the learned Authorised Representative for the Revenue reiterated the findings of the authorities below to say that the services in question are covered under the category of Business Auxiliary Service and the appellant is liable to pay the service tax the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he case of Commissioner of Central Excise versus Shabeer Travels - 2011 (24) STR 171, the Kerala High Court rejected the contention of the department that the subagent was rendering BAS to IATA agent and held that when an assessee is in the business of booking air tickets through another air travel agent, the assessee essentially renders Air Travel Agent services to the main travel agent, and would, therefore, not be liable to pay service tax under the category of BAS. The Larger Bench, accordingly held that by rendering services connected to travel by air, a travel agent would render "Air Travel Agent" services and which services cannot be said to be for promotion or marketing for the airlines. The Larger Bench then considered the issue whether the travel agent is promoting the business of CRS Companies. Referring to the circular dated 16.04.2010, issued by Central Board of Excise and Customs relating to service tax on re-insurance commission, it was held that the passenger cannot be deemed to be an audience for promotion of the business of CRS companies, for the passenger can neither book directly through a CRS company nor can a passenger be influenced by any travel agent to book....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nnot be levied on the amount received by the appellant in the form of incentive from the airlines as any such attempt would tantamount to double taxation which is not permissible in law. In fact, the clear observation was that once the appellant has opted to pay service tax at 1.2% of the basic fare under Rule 6(7) of the rules instead of paying service tax on the gross amount, receipt from airlines, commission or otherwise at normal rate of tax 10% or 12% as the case maybe, there could be no reason to levy service tax on any amount received by the appellant from airlines in addition to commission in the form of incentive. The appellant has stated that the department has not challenged the said order and the same has been accepted. 12. We now come to the second issue of receiving commissions from other than the airlines. The reliance placed by the learned Counsel for the appellant on the decision in M/s. Zuari Travel Corporation (supra) squarely covers the said issue. The Tribunal dealt with the question as to whether the sub-agent of an IATA Agent who books the tickets of air for customers and get commission from IATA Agent is rendering services under the category of "Business Au....