2025 (7) TMI 1453

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....dy been discharged by the appellant. Hence, it is not an issue disputed in this appeal. 2. The demand of Rs. 15,05,837/- covers the following three issues: (i) Taxability of Rs. 93,94,225 received as deposit incentives from airlines/main agents in 2013-14, under the category Business Auxiliary Service (BAS), purportedly treating the same as commission. Such receipts were actually in the nature of discount/interest on deposits/advances maintained with airline/main agent towards ticket purchases. (ii) Taxability of Rs. 10,68,861/- received by the appellant as cancellation charges during the period 2010-11 and 2011-12 under the category BAS. (iii) Recovery of alleged irregular availment of Cenvat credit of Rs. 2,34,618/- for the period 2013- 14. 3. M/s Vicky Tourism Pvt. Ltd. ("herein after referred as the Appellant"), is a private company based in Kolkata, is primarily engaged in booking domestic and international air tickets as an authorized IATA Agent (International Air Transport Association) and member of TAAI (Travel Agents Association of India). It also earns income from ancillary services like hotel bookings, car rentals, and visa processing. The Appellant holds se....

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....r 2013-14. This incentives received from airlines/main agents cannot be subject to Service tax in terms of Section 66D(e) of the Finance Act. The appellant submits that they have received an amount of Rs. 93,94,225/- from airlines/main agents during the period 2013-14 as an incentive for maintaining advances with them towards the purchase of tickets. This incentive is essentially in the nature of interest/discount, which is expressly covered under Section 66D(n)(i) of the Finance Act, exempting from service. 4.1. The appellant submits that the Ld. Adjudicating Authority has rejected Appellant's contentions on the sole ground that the reconciliation furnished by it between the ST-3 returns and books of accounts for the financial year 2013-14 duly certified by the Chartered Accountant did not mention the nature of the said payment. In this regard, the Appellant has furnished an airline/supplier-wise breakup of the amount received as deposit incentives, duly certified by an independent Chartered Accountant vide certificate dated 05-05-2016. The Chartered Accountant's certificate clearly acknowledges that the incentive was received against advances maintained with the airlines/main a....

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....r the positive list regime is also be evident from para 3.4 of TRU Circular bearing File No. B43/3/97 dated 26-06-1997. Accordingly, the appellant submits that the service tax demand of Rs. 1,10,093/- is without any merit, and hence deserves to be set aside. 6. Regarding the allegation of irregular availment of Cenvat credit of Rs. 2,34,618, the appellant submits that the Ld. Commissioner has disallowed Cenvat credit of service tax in respect of five invoices (at Sl. Nos. 10, 11, 27, 28, and 29 of Annexure 'B' to the SCN) solely on the ground that the Appellant allegedly failed to furnish proof of payment against these invoices. In this regard, the appellant submits that they have provided copies of each of the aforesaid invoices along with extracts of bank statements issued by HDFC Bank and Union Bank of India, clearly evidencing payment to the respective vendors against these invoices. In view of the aforementioned documentary evidences, the demand for recovery of Cenvat credit amounting to Rs. 2,34,618/- is not sustainable. 7. The Ld. A.R. reiterated the findings in the impugned order. 8. Heard both sides and perused the appeal documents. 9. In this case, we observe that....

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....the provision of any taxable service. We also find that Board has issued Circular bearing File No. B43/3/97 dated 26-06-1997, clarifying that cancellation charges collected are not liable to service tax. 10.1. We find that this view has been taken by the Tribunal, Delhi in the case of M/s Globe Forex & Travels Ltd. Vs CCE [2015 (37) S.T.R. 513 (Tri. - Del.)] The relevant part of the said decision is reproduced below: "8. As regards the service tax demand on the cancellation charges, these charges are collected from the persons booking the air ticket and this is not the amount received from the appellant's client - the airlines. It is not disputed that in respect of cancelled tickets, the airlines do not give any commission whatsoever to the appellant. In view of this, we hold that no service tax would be payable under Section 65(105)(1) of the Finance Act, 1994 on the cancellation charges which are a part of the airfare received by the appellant from the persons booking the air ticket who, subsequently, had cancelled the same. Moreover in any case, in terms of exemption Notification No. 22/97-S.T., dated 26- 6-1997 the amount received by the air travel agent, which is in e....