TaxTMI 
TaxTMI 
2024 (12) TMI 942
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....t CESTAT to hear the petitioner's said appeal on merits without insisting on pre-deposit and to condone the delay, if any, on the ground of limitation. (c) award costs of the present petition to the petitioner and against the respondents. (d) pass such other order or orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case." 2. Although the principal challenge is to the Order-in-Original dated 10 March 2023, the petitioner has been constrained to approach this Court in light of the provisions made in Section 35F of the Central Excise Act, 1944 [Act] and in terms of which a condition of pre-deposit has come to be created in terms of this statute. 3. Undisputedly, the statute no longer confers any discretion on the first appellate authority or the CESTAT to waive the condition of pre-deposit. It is in the aforesaid backdrop that the writ petitioner has approached this Court to submit that the facts of the present case would reveal that this is one of those rare and deserving cases where the Court would be justified in invoking its jurisdiction conferred by Article 226 of the Constitution. 4. From a reading of the O....
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....time basis for updation for its own travel related data. 27. The payment for this service rendered by the CRS companies was made by the airline, being the beneficiary, directly to the concerned CRS. Evidently, the airline specific CRS software and the data processing centre maintained by the CRS companies, accessed and used by the airline and the travel agents, were for the sole benefit of airline, facilitating sale of their products and services. It was for this service that the airline paid to the CRS companies which resulted in the booking of air tickets of the airline. xxx xxx xxx 29. The Assessee is an approved agent of International Air Ticketing Association (IATA). It was observed that they had agreements with M/s. Interglobe Technology Quotient Pvt. Ltd. The said companies were providing Central Reservation System (CRS) {a Global Distribution System} to the Assessee to book air ticket of various Airlines with which they had business tie up. By using this CRS, the travel agents are able to access the centralized data base and book a segment (air ticket/hotel room/car rental). The assessee uses this CRS for booking of air tickets of various airlines....
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....centives paid by the CRS Companies to IATA agents or the sub-agents are for promoting and marketing the business of the airlines and CRS companies respectively and so are leviable to service tax under the category of BAS." 8. Ultimately and on a consideration of the statutory scheme which existed, the CESTAT came to hold as follows: - "60. It is seen that the CRS commission is paid to a travel agent if he is able to attain an agreed level of segments to be booked. A passenger is not aware of the CRS Company being utilized by the travel agent for booking the segment nor can a passenger influence a travel agent to avail the services of a particular CRS Company. What is important to notice is that for an activity to qualify as "promotional", the person before whom the promotional activity is undertaken should be able to use the services. The passenger cannot directly use the CRS software provided by the Company to book an airline ticket. It cannot, therefore, be said that a travel agent is promoting any activity before the passenger." 9. The Larger Bench then proceeded to frame its conclusions as under: "82. A perusal of the aforesaid decision would indicate th....
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.... to render a finding that the incentive income so received was liable to be treated as commission. This becomes apparent from a reading of the following passages as appearing in the Order-in-Original: - "62. Whether service tax is leviable on the amounts claimed as productivity/performance linked benefit (PLB)/ incentive earned: 62.1 It has been alleged in the show cause notice that income was being collected by the noticee in addition to the commission being received from the Airlines or other IATA agents. These incomes are generated while discharging of their Air Travel Agent's services. A demand of service tax amounting to Rs.47,20,541/- has been raised in Table-11 above. In TABLE-E of their letter dated 05.03.2019 submitted to the department, the noticee had claimed the amounts shown in the column "PLB/Incentive", as productivity/performance linked benefit (PLB)/ incentive earned without placing any evidence in the form of contract/agreements with the Airlines or IATA Agent to substantiate their claim. 62.2 In their replies to the SCN, the noticee has contested the above demand on account of productivity/performance linked benefit (PLB)/ incentive....
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.... IATA agents had paid amounts to the noticee on several occasions during a month. Such payments cannot be considered as incentives as incentives are paid on the performance judged for a particular period, not on such frequent occasions. I observe that the amounts on which demand of Rs. 47,20,541 has been worked out in Table-11 are commission received from the airlines and the IATA agents for the service provided to the passengers which were not covered under the list of negative services under section 66D ibid. In terms of charging section 66B read with sections 65B (44), 66D, and 67 ibid., such commissions are leviable to service tax inasmuch as the commission received by the air travel agent from the airlines/IATA agent has to be included in the value of the taxable service provided by the air travel agent under rule 6 (1) (iv) of the Service tax (Determination of Value Rules, 2006. I observe that whereas with effect from 01.07.2012, the concept of negative List was introduced vide Section 66D of the Finance Act, 1994 which states that only the services mentioned in the negative list are non-taxable barring the exemption by vi11ue of any notification of and rest....
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....s, Excise & Service Tax Appellate Tribunal to waive the condition of pre-deposit in case of undue hardship. It becomes pertinent to note that Section 129E of the Act as it stood prior to its amendment by Finance Act (No. 2) of 2014 had conferred a discretion on the Commissioner (Appeals) as well as the CESTAT to dispense with the deposit liable to be made for the purposes of an assessee pursuing an appeal where it was found that the deposit of duty, interest or penalty levied would cause undue hardship. xxxx xxxx xxxx 4. Our attention was drawn to the recent decision rendered by a Division Bench of the Court in Mohd. Akmam Uddin Ahmed v. Commissioner Appeals Customs and Central Excise where the question of the power of a High Court to dispense with the requirement of pre-deposit and to frame appropriate directions reducing the burden on an assessee in extraordinary and exceptional circumstances was answered in the following terms:- "26. The petitioners placed reliance on judgments of Coordinate Benches of this Court in Pioneer Corpn. case [Pioneer Corpn. v. Union of India, 2016 SCC OnLine Del 6758 : (2016) 340 ELT 63], Narender Yadav case [Narender Yadav ....
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....el 8793], both of which, while dealing with the amended provision of Section 129-E of the Act, have permitted waiver of the mandatory pre-deposit as is envisaged in the said provision but, in exceptional circumstances. 29. In Narender Yadav case [Narender Yadav v. Commr. of Customs, 2019 SCC OnLine Del 12415], a Coordinate Bench of this Court, while recording that the petitioner was a salaried employee drawing Rs. 14,500 per month (i.e., Rs. 1,74,000 per annum) and that the order-in-original did not give any reasons for the penalty imposed on the petitioner, directed that the requirement of pre-deposit under Section 129-E of the Act be waived. The relevant extract is below: "... The petitioner's grievance is that as H-card holder, imposition of over Rs. 3.8 crores penalty in the overall circumstances of the case, given that the order-in-original did not record any specific adverse finding against him, is unwarranted. The petitioner, therefore, seeks a direction that the requirement of pre-deposit as a condition for the hearing and disposal of the appeal - before the Commissioner (Appeal), should be dispensed with. The court has considered the submissi....
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....er Coordinate Bench of this Court in Manoj Kumar Jha v. DRI [Manoj Kumar Jha v. DRI, (2019) 365 ELT 166], allowed the appeal to be prosecuted on payment of partial pre-deposit, given the financial stringency of the appellant in the case, subject to the furnishing of bond or reasonable security. Reference can be made to para 3 of this judgment, which reads as follows: "3. To this Court, it appears that the petitioner is a man of limited means. It is not clear whether any prosecution has been launched against the petitioner. In these circumstances, in view of the material-on-record which suggests that the petitioner has very limited means to deposit any amounts, this Court is of the opinion that the relief is warranted. The requirement of pre-depositing of any amount directed to be waived, however, the petitioner shall furnish a bond and also provide reasonable security having regard to the list of immovable properties produced before the court. Subject to this, the requirement of pre-deposit is hereby waived. The petitioner's appeal shall be revived and now Cestat shall proceed to hear the parties on its merits after issuing adequate notice to the counsel." (em....
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....ine Del 13070 : (2015) 326 ELT 472] to hold that waiver of pre-deposit cannot be granted. xxx xxx xxx 41. Thus, an analysis of the conspectus of law as enunciated above gives a clear understanding that after passing of the Amendment Act on 6-8-2014, the amended Section 129-E of the Act and also Section 35-F of the CE Act shall be applicable in those cases where the appeal has been filed after 6-8-2014. 42. However, as discussed above, the Coordinate Benches of this Court have exercised and, thus, preserved the power as available under Article 226 of Constitution of India to either waive the pre-deposit condition or to grant the right to appeal subject to a part deposit or security. The power, albeit, has been exercised only in rare and exceptional cases. 43. It was held by the Allahabad High Court, speaking through Dr. D.Y. Chandrachud, Chief Justice (as His Lordship then was) in Ganesh Yadav case [Ganesh Yadav v. Union of India, 2015 SCC OnLine All 9174] that: "8. ... Whether the writ jurisdiction under Article 226 should be exercised, having due regard to the discipline which has been laid down under Section 35-F of the Act, is a separate matte....