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2025 (6) TMI 1734
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....-loader services to airlines companies. The Appellant charged separate considerations for the sale of food & beverages and provision of services to the airlines. The appellant pays Value Added Tax [VAT] on the sale of goods (food & beverages) and Service Tax on the amount charged for provision of services. The Appellant entered into an agreement with Airport Authority of India [AAI] and Delhi International Airport Private Limited [DIAL] whereby the lease granted to the Appellant for its works at airport premises was extended and the rights of AAl thereunder have been assigned to DIAL. The Appellant was required to pay annual lease rental to DIAL along with the royalty calculated in the manner set out in the agreement. Both these amounts were part of the consideration payable by the Appellant to DIAL for lease of premises at the airport. The said amount was recovered by DIAL by raising invoices on the Appellant, on which DIAL charged and paid appropriate Service Tax. Being cost incurred by the appellant in carrying out various transactions, the appellant recovered these charges from its customers. (ii) An audit of the service tax records of the appellant was conducted by the offi....
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....also imposed penalty amounting to Rs. 70,47,609/-under Section 76 Rs. 10,000/-on each ST-3 return for the period 2004-05 to 2015-16 under Section 77 and Rs. 1,68,60.8/9/- under Section 78 of the Act. The Commissioner dropped demand of service tax amounting to Rs. 76,76,059/- for the period 2012-13 on the difference between taxable value as submitted vide the letter dated 23.05.3014 by the Appellant. Aggrieved by the said order-in-original, the appellant filed the present appeal. 3. Learned counsel for the appellant submitted that the impugned Order-in-Original is a non-speaking order and has been passed by the Commissioner without considering the submissions of appellant. He submitted that the impugned order-in-original was nothing but a mere replication of the allegations made in the SCNs without any independent analysis. The show cause notice has given any explanation as to how the Appellant had collected service tax from the airlines, in absence of any such charges or tax mentioned in the invoice raised by the Appellant on the Airlines with respect to food items and beverages. Learned counsel further submitted that demand of service tax under Section 73 and demand of an '....
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....n on the amendments made in the Act, including introduction of Section 73A and Section 73B. The first show cause notice dated 24.10.2011 was issued to the appellant for the period 2004-05 to 2010-11 proposing to recover the amount under Section 73A. However, for the first two years of the said notice period, Section 73A was not even in existence in the Finance Act, 1994. Therefore, confirmation of demand for the period when the section under which demand was made did not exist is illegal and liable to be set aside. In this regard, learned counsel relied on the decision in Hindalco Industries Ltd. v. Assistant Collector, Mirzapur-2017 (52) S.T.R. 223 (Del.) wherein, while dealing with Section 11D (pari materia to Section 73A for excise duty), the Hon'ble Delhi High Court had held that the said provision cannot be invoked for recovering of an amount alleged to have been collected prior to the introduction of the said section. For the period 2004 to 2006 when Section 73A was not in existence, the Act provides for the borrowing of the provisions of Section 11D of the Excise Act (pari matería to Section 73A) through Section 83 of the Act. Learned counsel contended that the SC....
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....ned in the show cause notice were solely based on the objection raised during the Audit. No further investigations were carried out by the Department to substantiate the audit objections raised during the audit. Further, the impugned order-in-original was nothing but the replication of the allegations made in the show cause notice without any independent analysis. 3.5 Learned counsel for the appellant submitted that the SCNs had not invoked any provisions which were in force during the relevant period. The show cause notices had proposed to recover Service Tax for the relevant period from 2004-05 to 2009-10 and 2011-12 to 2015-16 which includes both prior and past the advent of negative list. However, the SCNs did not specify the category of 'taxable services' under which the said demand had been raised in respect of the period, prior to the 1.7.2012. Further, with respect to the period past 1.7.2012, the notice did not specify or elaborate so as to how the said transaction was covered under 'service' as per Section 65B (44) of the Act. Learned counsel stated that the SCNs had failed to invoke the provisions of Section 66 and Section 65 (105) of the Act with resp....
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....was towards allowing of use of Airport infrastructure by DIAL to the appellant. Such services provided by DIAL during the relevant period, were leviable to service tax. The Appellant, in their reply to the Department had admitted that they had paid AAI levy and the service tax on such AAI levy to DIAL. However, no invoice raised by DIAL to the Appellant had been put on record by the Appellant. Thus, whatever Service Tax was leviable on the services provided by DIAL to the appellant, the Appellant had collected the same along with Service Tax thereon, from their clients and paid the same to DIAL. Learned Authorized Representative further submitted that DIAL had provided taxable services to the appellant for which the consideration had to be paid by the appellant. However, they had collected the said consideration from their clients along with service tax and paid the same to DIAL. The appellant had collected service tax on the AAl levy, both on provision of services and supply of food but, had not paid the Service Tax collected by them on the invoices pertaining to supply of food items. Hence, the same was recoverable under Section 73A of the Act, and the extended period had been in....
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....ver service tax was leviable on the services provided by DIAL to the appellant, the appellant had collected the same along with service tax thereon from their clients and paid the same to DIAL. Learned Authorized Representative prayed for dismissing the appeal. 5. We have heard the Ld Counsel for the appellant, the learned Authorized Representative for the Department and perused the records. The issue for our consideration is whether the collection of 13% airport authority levy by the appellant from their clients is inclusive of component of service tax, as alleged by the Department. 6. We note that the instant impugned order has adjudicated six show cause notices as detailed in the table below:- Sl No. SCN date Period Amount Confirmed (Rs) Amount dropped(Rs) Sections invoked 1 24.10.2011 2004-05 to 2009-10 1,68,60,879 - 73A, 75,76,77, & 78 2 21.12.2012 2011-12 1,32,62,106 - 73A, 75,76,77 3 22.05.2014 2012-13 1,03,81,565 76,76,059 Best Judgment: 72,73,75,76,77(2) & 78 4 20.04.2015 2013-14 1,26,62,093 - 73A, 75,76 &77 5 23.03.2016 2014-15 1,30,27,585 73A, 75,76 &7....
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....h amount shall either be credited to the Consumer Welfare Fund referred to in section 12C of the Central Excise Act, 1944 or, as the case may be, refunded to the person who has borne the incidence of such amount, in accordance with the provisions of section 11B of the said Act and such person may make an application under that section in such cases within six months from the date of the public notice to be issued by the Central Excise Officer for the refund of such surplus amount. 7.1 From the above, we note that Section 73A (w.e.f. 18.04.2006) provides that any person who has collected any amount in excess of Service Tax assessed or determined and paid on any taxable service from recipient of Service Tax in any manner as representing Service Tax, shall forthwith pay the amount so collected to the credit of the Central Government.The provisions of this section come to play only when any excess amount has been collected as service tax from the service recipient. If such amount of service tax is collected, which is in excess of service tax assessed or determined or paid on any taxable service, such amount is required to be deposited forthwith to the credit of the Central Governmen....
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....the Finance Act, it is necessary that the amount collected has been collected as representing service tax. In the present case, the amount which has been collected by the appellant is termed as 'taxes and fees', which include all taxes collected on behalf of the hotel. This amount has also been remitted to the hotels. The contention of the appellant is that it is not collecting any amount representing as service tax and so the provisions of section 73A of the Finance Act could not have been invoked. It is also the contention of the learned counsel for the appellant that the amount of hotel taxes collected from the customer has duly been remitted to the hotels and no amount of tax has been retained by the appellant. 48. To substantiate that the appellant collected taxes under the head "hotel taxes and fees' and paid it to the hotel and no part of it has been retained by the appellant, the appellant has referred to a sample hotel confirmation voucher of Booking ID NH2115510482641 issued by the appellant to Mr. Jatinder Singh (customer). This sample voucher shows that the total amount charged by the appellant from the customer is Rs. 4751/- out of which the room charges/ base....
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....by Griffth C.J., not 'to include money deposited under an agreement that if it was not legally payable it will be returned' (Words & Phrases p. 274). We therefore, semanticise "Collected' not to cover amounts gathered tentatively to be given back if found non-exigible from the dealer." (emphasis supplied) In the present case, the DGCEI fails to make out even a prima facie case that some portion of the service tax collected by the Petitioners from the customers 'as representing service tax' or otherwise has been "retained' by them. Without such prima facie conclusion, it cannot be inferred that the Petitioners have violated Section 73A (1) of the FA." (emphasis supplied) 9. The provisions of Section 73A was examined by the High Court of Delhi in the case of MakeMyTrip (India) Pvt Ltd vs Union of India [2016(44) STR 481(Del)]and the relevant paras are reproduced hereinbelow:- "Analysis of Section 73A of the FA 53. Next, it is necessary to examine in some depth Section 73A of the FA particularly since the case of the DGCEI is that both Petitioners have collected service tax from their customers and have not deposited it with the Central Governm....
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....t" from the recipient of taxable service "in any manner as representing service tax" and have not retained such amount without passing it on to the Central Government. 56. The case of the DGCEI on the other hand is that irrespective of whether the hotels have paid the service tax passed on to them by the Petitioners, since it is the Petitioners who have collected' the said component service tax, it is the Petitioners who are liable to, under Section 73A (1) of the FA, to credit the tax so collected to the account of the Central Government and their failure to do so results in violation of Section 73A of the FA. 57. The case of the Petitioners that they have included the service tax to the extent payable by the hotels in the bills raised on the customers but have not retained such service tax and have passed it on to the hotels appears to have not been considered by the DGCEI in the correct perspective. The understanding of the DGCEI of the transaction of online booking of hotel rooms using the web portals of the Petitioners appears to be prima facie incorrect. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 60. In the presen....
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....e of food and beverages invoice. A perusal of the invoices reveal that VAT & AAI levy and service tax and AAI levy was collected on the invoices issued to their customers. However, we are not able to accept that service tax was not indicated separately in the invoices issued for provision of services. 11. We also find support from para 4.1.1 of the Board's Circular no. 201/11/2016-ST dated 30.09.2016 issued in respect of arrest guidelines in service tax, the relevant portion is reproduced hereinbelow: "F.No. 137/47/2013-Service Tax Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Service Tax Wing New Delhi, the 30th September, 2016 To All Principal Chief Commissioners/ Chief Commissioners of Central Excise/Service Tax Principal Directors General/ Directors General of Goods & Service Tax/Systems/Central Excise Intelligence/ Audit/Tax Payer Services Chief Commissioner AR CESTAT All Principal Commissioners/Commissioners of Central Excise/Service Tax All Principal Additional Directors General/ Additional Directors General Audit ....
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....bills, contracts, etc. An amount should be clearly indicated as service tax. The copies of sample invoices /bills, contracts, etc. which cover the period being investigated should be in the file. 4.1.2 Amount should exceed Rs. 2 crore. 4.1.3 Failure to pay the amount so collected to the credit of the Central Government: The ST3 return filed by the assessee for the relevant period, showing the self-assessed value of taxable services and service tax paid should be available in file. Where no such return has been filed, an observation to this effect should be made since this will make the departmental case stronger. Xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx" 12. We find that the aforesaid arrest guidelines issued by the Central Board of Excise & Customs (now CBIC) has directed that any amount collected as Service tax should be indicated as such in the bills/challans/invoices etc., for the period under investigation. This is not the case in the instant appeal. The invoice mentioned supra does not indicate any service tax collection by the appellant. A perusal of the invoice makes it abundantly clear that the appellant had merely colle....
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....ther statutes where the applicability of Article 246 of the Constitution of India, read with Seventh Schedule thereof is in question, the Court may have to take recourse to various theories including aspect theory, as was noticed by this Court in Federation of Hotel & Restaurant Association of India, etc. v. Union of India& Ors. [(1989) 3 SCC 634]. 25. If the submission of Mr. Hegde is accepted in its entirety, whereas on the one hand, the Central Government would be deprived of obtaining any tax whatsoever under the Finance Act, 1994, it is possible to arrive at a conclusion that no tax at all would be payable as the tax has been held to be an indivisible one. A distinction must be borne in mind between an indivisible contract and a composite contract. If in a contract, an element to provide service is contained, the purport and object for which the Constitution had to be amended and clause 29A had to be inserted in Article 366, must be kept in mind. 26. We have noticed hereinbefore that a legal fiction is created by reason of the said provision. Such a legal fiction, as is well known, should be applied only to the extent for which it was enacted. It, although mu....