Custom, Excise & Service Tax Tribunal
Aman Travels vs Ce & Cgst Lucknow on 15 July, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD
REGIONAL BENCH - COURT NO.I
Service Tax Appeal No.71222 of 2018
(Arising out of Order-in-Appeal No.159/ST/Appeal/Audit-LKO/2018 dated
23/03/2018 passed by Commissioner (Audit) Central Goods & Services Tax,
Lucknow)
M/s Aman Travels, .....Appellant
(532/557, Banarasi Tola, Aliganj, Lucknow-226024)
VERSUS
Commissioner of Central Excise, Lucknow ....Respondent
(7-Havelock Road, Lucknow-226001)
APPEARANCE:
Shri Utkarsh Malviya, Advocate for the Appellant
Shri Santosh Kumar, Authorised Representative for the Respondent
CORAM: HON'BLE MR. P.K. CHOUDHARY, MEMBER (JUDICIAL)
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
FINAL ORDER NO.70420/2024
DATE OF HEARING : 15 March, 2024
DATE OF PRONOUNCEMENT : 15 July, 2024
SANJIV SRIVASTAVA:
This appeal is directed against order in appeal No 159-
ST/Appeal?Audit LKO/2018 dated 23.03.2018 of the
Commissioner (Appeal) Central Goods & Service Tax and Central
Excise Audit Lucknow. By the impugned order following has been
held:
ORDER
"I, modify the Order-in-Original No. 195/DC/ST/LKO/2016-17 dated 16.03.2017 passed by the Deputy Commissioner, Service tax Division, Lucknow to the extent as discussed above Service Tax Appeal No.71222 of 2018 2 The Appeal No. 86-ST/2017 Dated 22.05.2017 filed by M/s. Aman Travel, 532/557 Banarasi Tola, Aliganj, Lucknow, is partially allowed, accordingly"
2.1 Appellant is a proprietorship firm firm engaged in providing services under the category of rent a cab service, tour operator services, travel agent service for booking of passage which are taxable as per Section 65 (105) (o) (n) and (l) of the Finance Act, 1994. They are registered with department.
2.2 On basis of information received from income tax department to the effect that during the Financial Year 2012-13, to effect that appellant had received Amount of Rs 83,55,846.50 under section 194 C, enquiries were made from the appellant.
2.3 On the basis of the enquiries made it was found that the appellant had short paid the service tax as detailed in table below:
FY Amount Value after 60% Taxable value Rate ST Payable received as abatement (40% as per 67 (2) of ST (inclusive of per 26AS of amount of the Act, (%) cess) received) 1994 2011-12 9079709 3631884 3292733 10.3 3,39,151 2012-13 3037100 1214840 1081203 12.36 1,33,637 (upto 30.06.12) 2012-13 5209462 2083785 1854561 12.36 2,29,224 (from 01.07.12) 2013-14 5069065 2027626 1804580 12.36 2,23,046 2014-15 3708702 1483481 1320293 12.36 1,63,188 10,88,246 2.4 A show cause notice dated 13.05.2016 was issued to the appellant asking him to show cause as to why:
(i) The Service Tax amounting to Rs. 10,88,246.00/-
(Rs. Ten Lakhs Eighty Eight Thousand Two Hundred and Fourty Six only) should not be demanded and recovered under proviso to Section 73(1) of the Finance Act, 1994 Service Tax Appeal No.71222 of 2018 3
(ii) The interest due thereon on the service tax payable should not be demanded and recovered under Section 75 of the Finance Act, 1994
(iii) Penalty should not be imposed upon them under the provisions of Section 78 of Act of the Finance Act 1994 for failure to pay Service Tax & suppressing the facts and value of taxable service
(iv) Penalty should not be imposed upon them under Section 77(1)(d) of the Act for not depositing Service Tax in due time as per Rule 6 of the Service Tax Rules, 1994 and Section 68 of the Act along with Late fee for not filing return, as prescribed under Section 70 of the Act read with rule 7 of the rules 1994 2.5 The show cause notice was adjudicated as per the order in original dated 16.03.2017 holding as follows:
(i) I confirm the demand of Rs. 10,88,246/- (Ten Lacs Eighty Eight Thousand Two Hundred and Forty Six only) under proviso to Section 73 (1) of the Finance Act, 1994.
(ii) I confirm Interest under section 75 of the Finance Act, 1994 on account of nonpayment of Service Tax as mentioned above.
(iii) I impose penalty amounting the Rs. 10,88,246/-, under Section 78 of the Act for failure to pay service tax & suppressing the facts and value of taxable services. The party may avail the benefit of reduced penalty as per provision of the Section78 of the Act ibid.
(iv) I impose penalty amounting the Rs. 10,000/-, under Section 77(1) (d) for not depositing Service Tax in due time as per Rule 6 of the Service Tax Rules, 1994 and Section 68 of the Act.
(v) I impose Late Fee amounting the Rs. 1,80,000/-, under Section 70 of the Finance Act, 1994 read with Rule 7C of the Service Tax Rules, 1994 for not filing/late filing of the Service Tax Returns.
Service Tax Appeal No.71222 of 2018 4 2.6 Aggrieved appellant filed the appeal before the First Appellant authority, who has vide the impugned order modified the order in original to the extent of reducing the penalties imposed under Section 78 to 50% of the penalty imposed by the adjudicating authority.
2.7 Aggrieved appellant ahs filed this appeal 3.1 Have heard Shri Utkarsh Malviya, Advocate for the Appellant and Shri Santosh Kumar, Authorized Representative for the revenue.
3.2 Arguing for the appellant learned Counsel submits:
The services provided by them to HLFPPT are correctly classifiable under the category of Good Transport Operator Services and not under the category of Rent a cab service. In the present case the services provided by the appellant needs to be taxed under RCM and liability should be on service recipient.
Extended period should not have been invoked. No penalties should have been imposed.
3.3 Arguing for the revenue learned authorized representative re-iterates the findings recorded in the impugned order.
4.1 We have considered the impugned order along with the submissions made in appeal and during the course of arguments.
4.2 Impugned order records following findings:
A. The Appellant's plea is that supply of services to Hindustan Latex was a pick up van and it should be classified under GTA service on a payment basis. Firstly, I observe that this service does not fall under GTA service, since the GTA service stipulates that there must be an agreement between three persons i.e. Transporter, Consigner and Consignee. But the appellant did not provide any agreement/ documentary evidence regarding GTA service which may prove that they fulfill the conditions of GTA service The aforesaid OIO is very explanatory in this regard, and appellant had submitted before the Adjudicating Authority that HLFPPT is an education Service Tax Appeal No.71222 of 2018 5 institute, so service tax is not leviable on it. Afterwards, the appellant submitted in the personal hearing that this fall‟s under the GTA service, which implies that the appellant is trying to mislead the department about the service rendered by them to the HLFPPT. I also observe that the Appellant has not submitted the copy of their contract/ agreement with HLFPPT. Though the Appellant has stated as mentioned the „relevant paragraphs' of such contract/ agreement under the heading `statement of facts' in their appeal memo, still in absence of the copy of such contract/ agreement the veracity of such 'relevant paragraphs', is not verifiable. In any case, if such 'relevant paragraphs', stated by the Appellant, are accepted for a moment without acceptance thereof, even then it does not fall favorable to the Appellant. HLFPPT being a trust promoted by HLL Lifecare Limited does not fulfill the definition of educational institute as mentioned in the aforesaid OIO. There is no material on records produced which proves that the services of Rent-a-cab is provided to an educational institute. Merely providing some kind of training for health care service does not entitle to qualify an organization to qualify as educational institutes which is supposed to provide qualification recognized by the law for the rime being in force. Recognized by law means Indian Law. This has been clarified in details by the CBEC vide Circular No. 107/01/2009-ST dated 28-01-2009. Therefore the service receiver is neither an Educational Institute nor a Vocational Training Institute as clarified in this circular. In view of above, it comes out that the providence of vehicle to a client for a `consideration' or `payment' or 'return' is covered within the ambit of 'rent-a-cab service'. Hence the Rs.10,88,246/- has been demanded and confirmed is correct.
(B) The Appellant's next plea is that another case the Rent-a-
Cab was provided to U.P. Power Corporation. I found that the amount received by the appellant from UPPCL does not include in the demand of Service Tax of Rs.10,88,246/-. The Service Tax Appeal No.71222 of 2018 6 appellant has provided the agreement between UPPCL and them. It is clearly mentioned in the SCN that the appellant entered with the agreement only with UPPCL therefore receipts from all the service recipient except UPPCL, were liable for payment of service tax and were taken for calculation of service tax to be paid w.e.f. 01.07.2012. Hence I found that the appellant's instant plea is not tenable.
(C) The Appellant's another plea regarding Rent-A-cab was provided to an educational Institute (Medical College) for transportation of student. I found that the appellant did not provide any Contract/ agreement between King George Medical University and them except bill dated 21.09.2012 issued to King George Medical University for charges for a taxi hired for four day local use. From perusal of the said bill it cannot be ascertained that the service is provided for transportation of students, faculty and staff. Rather it appears that it is used for performance of non-educational services. Hence I found that the appellant's instant plea is also not acceptable.
Further I also found that the adjudicating authority has properly discussed the issue on merit and no malafide intention can be seen in the OIO. I also notice that the Appellant, in the present appeal, has failed to produce any evidence to reject the adjudicator's said findings.
In view of above, I hold that the impugned demand of service tax, amounting to Rs.10,88,246/-, is sustainable and it was rightly confirmed by the adjudicator."
4.3 From the facts on records it is evident that the enquiries were made against the appellant on the basis of the information provided by the income tax department for the year 2012-13. The entire demand has been made against the appellant on the basis of the information contained in the 26AS statement of the appellant, provided by him during the course of investigation. However show cause notice has not identified the service recipients in any manner except for recording as follows:
Service Tax Appeal No.71222 of 2018 7 "8. Whereas the party appeared before the Superintendent Preventive, Central Excise, Lucknow on 09.05.2016 to tender his statement, but submitted that he is not feeling well and is unable to give his statement and requested for appearance on 12.05.2016. The party appeared on 12.05.2016 and in his statement (RUD-7) stated
(a) That Registration was taken on the address of 2/131, Vikas Nagar , Lucknow which has been changed.. Now services are being provided from 532/557, Banarsi Tola, Aliganj.
(b) That mainly services were provided to M/s Hindustan Latex Family Planning Promotion Trust (HLFPPT) and sometimes provided to M/s UPPCL and Medical collage Lucknow.
(c) Agreement was entered only with UPPCL and services provided to other service receivers were on oral directions.
(d) That I never charged service tax in bills raised by me.
(e) Since 100% service tax was paid by UPPCL therefore under the belief that I am not required to pay service tax ,l did not paid the same
(f) That Rs.1,08,017/- was income tax deduction. It was mentioned as Service (f tax deduction by mistake in my letter dated 09.12.2014
9. Whereas the party provided the 26AS for the period from 2011-12 to 2014-15 along with work orders of Uttar Pradesh Power corporation Ltd dated 19.06.2013 (RUD-8). As per Para 2.10 of the conditions the service receiver i.e. UPPCL agreed to pay Service tax as per Rules. The party did not provide any agreement entered with any other service recipients
10. Whereas, the party's claim that there is no service tax liability on them during the F.Y.,2012-13 is not correct as the service tax is applicable on 'Rent-a-cab service w.e.f. 16.07.1997. W.e.f 01.7.2012 Service tax was payable by the Service Tax Appeal No.71222 of 2018 8 party on the receipts received from service receivers not covered under the conditions as laid down in Notification 30/2012 dated 20.06.2012. Since the party entered with the agreement only with UPPCL therefore receipts from all the service recipient except UPPCL, were liable for payment of service tax and are taken for calculation of service tax to be paid w.e.f 01.07.2012.Prior to 01.07.2012 full service tax was payable by service provider on the abated amount."
4.4 From the above we are unable to make out as to what were the amounts received by the appellant from which service recipient. The show cause notice has been issued making 26 AS of the appellant as basis. For the amounts that get reflected in the 26 AS statement definitely the name of person deducting TDS would have been reflected along with the amount paid and TDS deducted. In fact though show cause notice records the finding to the effect that services to the UPPCL were provided under agreement and the service tax due on said services was to be paid by UPPCL in terms of the agreement clause 2.10, the show cause notice do not record as to what amounts were received from UPPCL and whether the same have been deducted from the 26AS receipts.
4.5 Further we find that nothing has been stated in respect of the other service recipients. At least the details of the receipts as per 26AS which would be available service recipient wise could have been indicated or enquiries made from by the said service recipients in respect of the services received and the payment of service tax under reverse charge mechanism.
4.6 Undisputedly in the present case demand has been made from the appellant on the basis of abated value i.e. 40% of the amount received by the appellant as per 7(b) of the Notification No 30/2012-ST dated 20.06.2012.
4.7 It is true that the major service recipient of the appellant namely HLFPT is not an educational institute as defined by Notification No 25/2012-ST dated 20.06.2012, and hence the services provide to them are not exempt from payment of Service Tax Appeal No.71222 of 2018 9 service tax. Both the authorities have given the specific reasoning for the same and after taking notice of the activities under taken by the trust and its constitution. Appellant changed the stand before the appellate authority and claimed that the services provided by them to the said trust were more appropriately classifiable under the category of GTA services. However the said claim is without any basis for the reason that appellant could have claimed so only by production of consignment notes issued by them for transportation of the goods for the said trust. Not even a single consignment note has been placed on record anywhere. Letter dated 04.03.2014 of HLFPPT addressed to the appellant, is reproduced below which indicates the nature of services provided by the appellant to the said trust, Service Tax Appeal No.71222 of 2018 10 4.8 From the above letter it is evident that the appellant was providing rent a cab service only to the said trust and the services provided by the appellant have been rightly held to be classifiable under the said category for making the demand.
4.9 In respect of the demand made for services provided to King George Medical College Lucknow, the claim made by the appellant has been denied on a very flimsy ground stating that the services might be for carriage of students, faculty of staff. Further it is stated that the appellant has not produced copy of any agreement for providing said services. The factum of provision of service to King George Medical College could have been ascertained from 26 AS statement itself which would have given the details of deductor. We are unable to record any final finding on this aspect.
4.10 Thus while we uphold that the demand made in respect of the services provided to HLFPPT the same needs to be re- computed on the basis of actual receipts from the said trust.
4.11 The demand made in respect of services provided by the appellant needs to be re-examined in light of the payments received from the said said college treating the same as educational institution.
4.12 As the appellant was not filing the ST-3 returns during the disputed period in our view the demand made by invoking extended period of limitation cannot be faulted with. Also for the act of nonpayment of service tax by not disclosing the facts of provision of services, to department the penalties imposed upon the appellant cannot be faulted, but need to be re-determined after determining the quantum of service tax demanded.
4.13 Thus in view of the above we set aside the impugned order and remand the matter back to adjudicating authority for re- determination of the quantum of service tax payable in light of the observations made above.
Service Tax Appeal No.71222 of 2018 11 5.1 Appeal is partly allowed and matter remanded to original authority for redetermination of the quantum of service tax evaded and to be demanded.
5.2 Since matter is quite old, adjudicating authority should finalize the matter in remand proceedings within three months of receipt of this order.
(Pronounced in open court on-15 July, 2024) (P.K. CHOUDHARY) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) akp