Custom, Excise & Service Tax Tribunal
M/S Transit Tours & Travels vs Cce & St Vadodara-Ii on 13 February, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : ST/98/2012,ST/13730/2013, ST/13225/2014 (Arising out of OIA-COMMR-A-/14/VDR-II/2012 dated 05.01.2012, OIA-VAD-EXCUS-001-APP-341-13-14 dated 02.09.2013, OIA-VAD-EXCUS-001-APP-178-2013-14 dated 17.06.2014 passed by Commissioner (Appeals), Central Excise, Service Tax & Customs, Vadodara-I, II) M/s Transit Tours & Travels : Appellant (s) Versus CCE & ST Vadodara-ii : Respondent (s)
Represented by:
For Appellant (s) : Shri Willingdon Christian, Advocate For Respondent (s): Shri G. Jha, Authorised Representative CORAM:
Dr. D. M. Misra, Honble Member (Judicial) Mr. Raju, Honble Member (Technical) Date of Hearing/Decision : 13.02.2018 Order No. A/10356-10358 / 2018 Per: Dr. D. M. Misra These three appeals are filed against respective orders-in-appeal passed by the Commissioner (Appeals) of Central Excise Service Tax & Customs, Vadodara-I, II, since, involve a common issue are taken up together for disposal, with the consent of both sides.
2. Briefly stated the facts of the case are that the appellants are registered as a service provider under the taxable category of Air Travel Agent Service and during the relevant period they have rendered services under the said category and discharged service tax. Also, the appellants in providing tickets to their customers, at times, purchased tickets from other authorized IATA Travel Agents and sale the same to their customers for which they received a discount from the said Air Travel Agents. Also, the appellants used software of various software developers, namely, M/s Amadues India Pvt. Ltd etc., to access to the Centralized data base for booking tickets. Alleging that the discounts received by the appellants from the Air Travel Agents and also incentives received from the software developers are liable to service tax, demand notices were issued to the appellants for recovery of total service tax amount of Rs. 7,87,492/- with interest and penalty. On adjudication, the demands were confirmed with interest and penalty. Aggrieved by the said order, they filed appeals before the Ld. Commissioner (Appeals), who inturn, rejected their appeals. Hence, the present appeals.
3. Ld. Advocate Shri Willingdon Christian for the appellants submits that the appellants are providing Air Travel Agents Service and at times to meet exigencies they have also purchased tickets from other registered Air Travel Agents and supply it to their customers. It is his contention that the authorized Air Travel Agents discharge the service tax on the applicable amount and pass discounts to the appellants. It is his contention that the said discount cannot be subjected to service tax, as the entire transaction between the appellant and the registered Air Travel Agent is that of sale and purchase of the Airline Tickets and not promotion or marketing service rendered by the appellants to the Air Travel Agents. In support, he has referred to the judgement of this Tribunal in the case of Trade Wings Ltd. Vs. Commissioner of Central Excise & Service Tax- Jaipur-I 2017 (52) STR 149 (Tri Del.). On the second issue, the Ld. Advocate fairly submits that this Tribunal has already decided the issue vide Final Order No. A/13936-13964/2017 dated 27.12.2017, which is against the appellant. However, he submits that the demand in the case of show cause notice dated 23.09.2010, being issued invoking extended period of limitation on the said issue, therefore, as held in the order, it should be restricted to normal period of limitation.
4. The Ld. AR for the Revenue reiterated the findings of the Ld. Commissioner (Appeals).
5. We find that on the first issue, this Tribunal in Trade Wings Ltds case (supra) taking into consideration the fact that the nature of transaction between the registered IATA Agents and the subsequent sub-agent, is that of sale and purchase, and accordingly, held that service tax is not required to be paid by the said sub-agent on the discount received. It is observed as follows:
5.?We have heard both the sides and perused appeal records. The admitted facts are that the appellants are registered with the Department as travel agent and were discharging service tax under the category of travel agent service. The dispute in the present case relates a part of their activity wherein they get tickets from the another travel agent and sell to travelling public. The commission/profit earned in such transaction is sought to be taxed under the category of Business Auxiliary Service. We note that there is no arrangement either by contract or by otherwise between another travel agent and the appellant for promoting the business of another travel agent. The travelling public is getting only ticket with no identity linking the same to another travel agent. In such situation, it could not be said that the appellant is promoting the business of another travel agent, in their capacity as sub-agent. No such fact has been established in the impugned order by the lower authority. The emphasis by lower authority is only on the point that when they are not selling tickets of airlines directly they are liable to service tax under Business Auxiliary Service. We find such summary assumptions cannot be sustained. It is not established that the appellants are acting as commission agent for another travel agency. Evidence to that effect has not been adduced by the lower authorities. The transaction is only of sale and purchase of tickets by the appellant. 5.1. On the second issue, about liability of service tax on incentives received from various software developers, this Tribunal after taking note of the order of the Principal Bench in Ram Krishna Travels Pvt Ltds case (supra), observed as follows:-
6. We find that after discussing the issue in detail in similar facts and Circumstances the Principal Bench of this Tribunal in Delhi in D-pauls case (supra) observed as follows:
5. After hearing the rival submissions and on perusal of record, it appears that the assessee-appellants are travel agent and providing the tickets for air as well as railways. They also act as the Rail Travel Agents Service which is covered under Section 65(87) of the Finance Act, 1994 and liable to pay the Service Tax. Regarding the commission/incentive received from GDS/CRS, it may be stated that the said GDS/CRS companies are providing adequate free of cost computers with essential accessories and software to the travel agents at their premises. These computers are connected worldwide to the GDS/CRS, which linked to ticket sales offices of various airlines, hotels and car rental agencies spread across the world. They are by using these GDS/CRS for booking tickets, receiving incentives from the said companies for every segment booked by them. Hence, the service provided by the assessee-appellants has rightly been covered under the heading Business Auxiliary Service as defined under Section 65(19) of the Finance Act, 1994. Thus, we are of the view that the assessee-appellants being providing Tour Operators Service, the commission received by them is for Business Auxiliary Service under Section 73(1) of the Finance Act, 1994. The case law cited by the learned counsel for the assessee-appellants is not applicable in the instant case as the same was dealing with the advertising agencies. So, on the facts, the ratio laid down in the said case is not applicable to the present case.
6. Needless to mention that in the Central Excise, Customs & Service Tax Budget, 2016-17 (published by the Legal Matrix Publications, Delhi-9, on Page 258) makes a reference to High Level Committee and states that certain issues were clarified and there in Paragraph 15.1.2, it was mentioned that :
15.1.2 It is clarified that incentives received by the Air Travel Agents (ATAs) from the Companies providing Computer Reservation System (CCRS) are for using the software and platform provided by the CCRS like Galileo, Amadeus, etc. The CCRS are providing these incentives either for achieving the targeted booking of air tickets or for loyalty for booking of air tickets using their software system. Thus, the service provided by CCRS is to the Airlines and Air Travel Agent is promoting the service provided by CCRS to Airlines. Thus, the service provided by the ATAs to CCRS is neither covered in the negative list (Section 66D of the Finance Act, 1994) nor exempt by a notification. Therefore, service tax is leviable on the same.
7. The said principle has been followed subsequently, in Govan Travels case (supra). Adhering to the judicial discipline, following the principle laid down in the aforesaid case, we are of the opinion that service tax is leviable on the amount received by the Appellants from the CRS companies under the category of Business Auxiliary Service(BAS). However, as pointed out by the ld. Adv. there has been uncertainty and confusion relating to applicability of levy of Service Tax on incentives received by the appellants against use of CRS system provided by various companies namely, Gallilieo, amadus etc. during the relevant period of time. This has been clarified by issuance of circular dated 29.02.2016. In these circumstance, we are of the view that the demand be restricted to normal period limitation and no penalty is imposable on the Appellants. To ascertain/compute , the demand for normal period, the matters are remanded to the adjudicating authority. Appeals are disposed of accordingly.
6. Following the aforesaid judgments, the demands relating to the first issue is set-aside and it should be restricted, on the second issue to the normal period of limitation. In the result, the impugned orders are modified and the appeals are disposed of as above.
(Dictated and pronounced in the Court)
(Raju) (D. M. Misra)
Member (Technical) Member (Judicial)
G.Y.
5
Appeal No. ST/98/2012,ST/13730/2013,
ST/13225/2014