Custom, Excise & Service Tax Tribunal
Neeta Tours &Amp; Travels vs Commissioner Of Service Tax Mumbai-Ii on 7 May, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
WEST ZONAL BENCH
COURT No.
Appeal No. ST/174/2012
ST/CO/71/2012
(Arising out of Order-in-Original No. 7/ST/SB/2011-12 dated
04.01.2012 passed by Commissioner (TAR), Mumbai)
Neeta Tours & Travels Appellant
A/913 Sarasvati Niwas,
Rokadia Lane, SVP Road,
Borivali (W), Mumbai 400 092
Vs.
Commissioner of Service Tax Respondent
Mumbai-II 4th floor, New Central Excise Bldg., M.K. Road, Churchgate, Mumbai 400 020.
WITH Appeal No. ST/345/2012 (Arising out of Order-in-Original No. 40/ST/SB/2011-12 dated 30.03.2012 passed by Commissioner (TAR), Mumbai) Neeta Tours & Travels Appellant A/913 Sarasvati Niwas, Rokadia Lane, SVP Road, Borivali (W), Mumbai 400 092 Vs. Commissioner of Service Tax Respondent Mumbai-II 4th floor, New Central Excise Bldg., M.K. Road, Churchgate, Mumbai 400 020.
AND Appeal No. ST/466/2012 ST/CO/112/2012 (Arising out of Order-in-Appeal No. YDB/21/2012 dated 22.03.2012 passed by Commissioner of Central Excise (Appeals), Mumbai-IV) Neeta Tours & Travels Appellant 2 ST/174,345,466/2012 A/913 Sarasvati Niwas, Rokadia Lane, SVP Road, Borivali (W), Mumbai 400 092 Vs. Commissioner of Service Tax Respondent Mumbai-II 4th floor, New Central Excise Bldg., M.K. Road, Churchgate, Mumbai 400 020.
Appearance:
Shri Bharat Raichandani, Advocate for the Appellant Shri Roopam Kapoor, Authorised Representative for the Respondent CORAM:
Hon'ble Mr. S.K. Mohanty, Member (Judicial) Hon'ble Mr. Sanjiv Srivastava, Member (Technical) FINAL ORDER NO. A/85851-85853/2019 Date of Hearing: 06.02.2019 Date of Decision: 07.05.2019 PER: SANJIV SRIVASTAVA The details of the three appeals filed by M/s Neeta Tour and Travels under consideration are as stated in table 1 below:
Appeal/ Cross Order Appealed Period Amount of Penalties Objection No against tax demanded ST/174/2012 7/ST/SB/2011- April 4,77,23,920 Under Sec ST/CO/71/2012 12 dtd 04.01. 07 to with 76,77 & 12 March interest. 78 10 ST/345/2012 40/ST/SB/2011- 2002- 7,94,292/- Under Sec 12 dtd 30.03.12 03 with 76,77 & interest. 78 ST/466/2012 YDB/21/2012 2002- Refund of Not ST/CO/112/2012 dtd 22.03. 12 03 to 3,08,86,806 applicable.
2006- 07 1.2 By the order dated 04.01.2012, Commissioner Service Tax, Mumbai (Appeal No ST/174/2012) held as follows:
"ORDER 3 ST/174,345,466/2012 i. I hereby confirm the demand amount of Rs 4,77,23,920/- (Rupees Four Crore Seventy Seven Lakhs Twenty Three Thousand Nine Hundred and Twenty Only) under Section73(2) of the Finance Act, 1994.
ii. Recover of interest at the appropriate rate applicable during the relevant period of time, on the amount confirmed at i) above, from the date it became due till the date of payment, is hereby confirmed under Section75 of the Finance Act, 1994.
iii. Penalty of Rs 200/- per day or 2% of tax payable, per month whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax, is imposed under Section 76 of the Finance Act, 1994, subject to the maximum, specified in Section76 of the Finance Act, 1994 as it existed at the material time, for failure to pay appropriate service tax.
iv. For failure to obtain Registration for Advertisement Service as required under Section69 of the Finance Act, 1994 read with Rule 4 of the Service Tax Rules, 1994 a penalty of Rs 5000/- or Rs Two Hundred everyday during which such failure continues, whichever is higher, is imposed, under the provisions of Section77 of the Chapter V of the Finance Act, 1994. Also for failure to file ST-3 return as required under Section70 of the Act read with Rule 7 of the Service Tax Rules , 1994, a penalty of Rs 5000/- is imposed under the provisions of Section 77 of the Chapter V of the Finance Act, 1994.
v. A penalty of Rs 4,77,23,920/- (Rupees Four Crore Seventy Seven Lakhs Twenty Three Thousand Nine Hundred and Twenty Only) i.e. equal to the amount of Service Tax short paid by the assessee, under Section78 of the Finance Act, 1994. Further if the assessee pays the demand amount confirmed as per i) 4 ST/174,345,466/2012 above along with the interest payable thereon as per ii) above within thirty days from the date of communication of the Order, the amount of penalty liable to be paid by the assessee shall be 25% of the demand amount confirmed at i) above, provided further that the reduced penalty is also paid along with the confirmed amount and interest as mentioned above."
1.3 By the order dated 30.03.2012, Commissioner Service Tax, Mumbai (Appeal No ST/345/2012) held as follows:
"ORDER i. I hereby confirm the demand amount of Rs 7,94,292/-
(Rupees Seven Lakhs Ninety Four Thousand Two Hundred and Ninety Two Only) under Section73(2) of the Finance Act, 1994.
ii. Recover of interest at the appropriate rate applicable during the relevant period of time, on the amount confirmed at i) above, from the date it became due till the date of payment, is hereby confirmed under Section75 of the Finance Act, 1994.
iii. The demand amount of Rs 794292/- paid by the assessee vide challans dated 16.10.2006 is ordered to be appropriated.
iv. Penalty of Rs 200/- per day or 2% of tax payable, per month whichever is higher, starting with the first day after the due date till the date of actual payment of the outstanding amount of service tax, is imposed under Section 76 of the Finance Act, 1994, subject to the maximum, specified in Section76 of the Finance Act, 1994 as it existed at the material time, for failure to pay appropriate service tax.
v. For failure to file ST-3 return as required under Section70 of the Act read with Rule 7 of the Service Tax Rules , 1994, a penalty of Rs 5000/- is imposed 5 ST/174,345,466/2012 under the provisions of Section 77 of the Chapter V of the Finance Act, 1994.
vi. A penalty of Rs 7,94,292/- (Rupees Seven Lakhs Ninety Four Thousand Two Hundred and Ninety Two Only) i.e. equal to the amount of Service Tax short paid by the assessee, under Section78 of the Finance Act, 1994. Further if the assessee pays the demand amount confirmed as per i) above along with the interest payable thereon as per ii) above within thirty days from the date of communication of the Order, the amount of penalty liable to be paid by the assessee shall be 25% of the demand amount confirmed at i) above, provided further that the reduced penalty is also paid along with the confirmed amount and interest as mentioned above."
1.4 By the order in appeal dated 22.03.2012, Commissioner (Appeals) IV Central Excise Mumbai Zone - I, (Appeal No ST/466/2012) upheld the order in original dated 22.05.2009 of the Assistant Commissioner Service Tax Division IV Mumbai rejecting the refund claims filed by the appellant. By his order Assistant Commissioner has held as follows:
"7. In light of the findings as above, I reject all the five refund applications filed by M/s Neeta Tours and Travels, on 17.10.2008 as detailed below, under Section 11B of Central Excise Act, 1944 as made applicable to service tax by virtue of Section 83 of Chapter V of Finance Act, 1994.
S No Period Amount
1 2002-03 Rs 7,94,291/-
2 2003-04 Rs 43,39,305/-
3 2004-05 Rs 46,69,028/-
4 2005-06 Rs 89,82,464/-
5 2006-07 Rs 1,21,01,718/-"
1.5 Though all the three appeals were listed together
and have been heard together we find from the records 6 ST/174,345,466/2012 that issue involved in appeal No ST/466/2012, is that of rejection of refund claims filed by the appellants and is not exactly identical to the issues involved in other two appeals. Hence this appeal will be taken up for discussion separately.
Appeal No ST/174, 345/2012 and Cross Objections ST/CO/71/2012
2.1 Appellants are providing taxable services under category of "tour operator services", for which they have taken registration with the Service Tax authorities.
2.2 Acting on the intelligence to effect that they were providing point to point bus service and chartered bus service falling under tour operator service but were not paying service tax in respect of these services provided enquiries and investigation were made.
2.3 The services provided were made taxable with effect from 01.09.1997. However they were exempt from payment of service tax as per Notification No 52/1998-ST dated 18.07.1998 during the period 18.07.1998 to 31.03.2000.
2.4 These services were taxable with varying degree of abatement from 01.04.2004 to 05.07.2009. Vide Notification No 20/2009-ST dated 06.07.2009, the services provided or to be provided by a tour operator, having contract permit for interstate or intrastate transportation of passengers excluding tourism, conducted tours, charter or hire services were exempt from whole of service tax in other words the chartered bus service under tour operator's services continued to be taxable even after 06.07.2009.
2.5 Even though the services provided by the appellant became taxable from 01.04.2000 they did not obtained the registration, nor filed the return and neither paid the service tax due on the services provided by them. A show cause notice dated 30.08.2004 was issued to them by the 7 ST/174,345,466/2012 Deputy Commissioner Central Excise Mumbai V, asking them to show cause as to why service tax amounting to Rs 7,94,292/- required to be paid by them for the period 2002-03 should not be demanded and recovered from them in terms of Section 73 (1)(a) of the Finance Act, 1994.
2.6 They paid the service tax amounting to Rs 2,86,94,534/- (Rupees Two Crore Eighty Six Lakhs Ninety Four Thousand Five Hundred Thirty Four Thousand Only) only for the period 2005-06 and 2006-07 along with interest due amounting to Rs 22,02,791/- (Rupees Twenty Two Lakhs Two Thousand Seven Hundred and Ninety One Only).
2.7 For the period 01.04.2007 onwards though they had provided tour operator service (point to point bus service) (upto 05.07.2009), tour operator services (Chartered Bus Service) (upto 31.03.2010) and advertisement services (upto 31.03.2010) they had not filed ST-3 returns in respect of the services provided nor have paid any service tax in respect of these services rendered.
2.8 After completion of investigations a show cause notice dated 23.08.2010 was issued to the appellants demanding service tax payable and not paid by them during the period as indicated below:
S Taxable Service Period Service Tax
No From To Demanded'
Rs
1 Tour Operator (Point to Point) Apr 07 05.07.2009 4,42,99,945
2 Tour Operator (Chartered Bus) Apr 07 31.03.2010 33,70,305
3 Advertisement Services Apr 07 31.03.2010 53,670
Total 4,77,23,920
2.9 The show cause notice at para 2.8 was adjudicated
by the Commissioner as per his order in para 1.2, supra. Aggrieved by the order of Commissioner, appellants are in appeal before us [Appeal No ST/174/2012].
8 ST/174,345,466/2012 2.6 The show cause notice at para 2.5 was adjudicated by the Commissioner as per his order in para 1.3, supra. Aggrieved by the order of Commissioner, appellants are in appeal before us [Appeal No ST/345/2012].
3.1 In their appeal appellants have challenged the order of Commissioner stating that-
i. they are having contract carriage or tourist vehicle with permit for inter-state or intra-state transportation of passengers therefore entitled for exemption under Notification No 20/2009-ST dated 07.07.2009 read with section 75 of the Finance Act, 2011 granting exemption retrospectively from 01.04.2009.
ii. exemption under the said notification was initially granted to contract carriage but by corrigendum issued vide F No 334/08/2009-TRU dated 31.08.2009 the same was granted to tourist vehicles. This exemption has vide Section 75 of Finance Act, 2011 made applicable retrospectively from 01.04.2000.
iii. It was clarified as per para 12.7 of TRU Circular No 334/3/2011-TRU dated 28.02.2011 that the said exemption has been granted retrospectively from 01.04.2000, in respect of transportation of passengers in a vehicle bearing contract carriage and tourist vehicle permit.
iv. The circulars issued are binding as has been held by various authorities as follows:
Deenabandhu Sahu and Others [AIR 1976 SC 1561] K P Vergheese [AIR 1981 SC 1922] Keshavji Ravji & Co [AIR 1991 1806] Vasudeeo V Dempa [1996 (88) ELT 638 (SC)] Jagat Dalal (P) Ltd [1996 (88) ELT 638 (SC)] Bengal Iron Corporation & Anr [1993 (66) ELT 13 (SC)] 9 ST/174,345,466/2012 Ranadey Micronutrients [1996 (87) ELT 19 (SC)] Poulose & Mathan [1997 (90) ELT 264 (SC)] British Machinery Supplies Co [1996 (86) ELT 449 (SC)] Usha Martin Industries [1997 (94) ELT 460 (SC)] v. In respect of tour operator service (point to point bus service) the demand has been made upto 05.07.2009 only which itself is admission of the fact that the services provided by them have been exempted by the Notification 20/2009-ST from that date onwards.
vi. Retrospective exemption as per notification no 20/2009-ST from 01.04.2000 in respect of point to point transportation has been held applicable in case of Rishabh Travels [2012 (17) Taxmann.com 3 (Tribunal -Delhi)] vii. In respect of Chartered Bus Services the possession and control of the Bus is passed on to the recipient of services, and in terms of Article 366 (29A)(d), such transactions could be subject to levy of taxes under entry 54 of State List has been held by the following decisions;
a. Krishna Chandra Behera and Another [1991 (083) STC 0325 ORI] b. Sri Ram [2009 (020) VST 0747 (ALL)] c. HLS Asia Ltd [2007 (8) VST 314 (Gauhati)] d. Peerless Shipping and Oilfield Services Ltd [2007 (008) VST 030 (Gauhati)] viii. Reliance placed on Rashtriya Ispat Nigam Ltd [(2002) 3 SCC 314] is not proper as the appellants have transferred the possession and control of the said buses to the customer and once transferred they were excluded from transferring the same to someone else. Hence the 10 ST/174,345,466/2012 test laid by the Apex Court in case of BSNL [(2006) 3 STT 245 (SC)] has been satisfied ix. They had paid service tax on Chartered Bus Services under protest on 05.03.2012 x. Non payment of tax in respect of the three demands made in the show cause notice was under bonafide belief that they were not required to service tax under the said categories and as such there was no fraud, suppression, wilfull mis- statement or any intention to evade service tax, so invocation of extended period is not justified and penalty imposed under section 76, 7, & 78 cannot be justified.
xi. Their bonafide belief is established by the letter issued by JS(TRU) No JS9TRU)/72/2009-TRU dated 04.11.2009.
xii. They had paid service tax under protest on point to point bus service for the period from 2002-03 to 2006-07 without collecting the same from passengers. Subsequently by Finance Act, 2011 these Services have been exempted from payment of tax retrospectively from 01.04.2000. xiii. They had no criminal intent or mensrea to evade payment of tax hence penalty under Section 78 is not justified. {Pepsi Foods Ltd 2010 (260) ELT 481 (SC)]. Also penalty under Section 76 and 78 should not have been imposed simultaneously as held in case of First Flight Courier [2011 (22) STR 622 (P & H)] 4.1 We have heard Shri Bharat Raichandani, Advocate for the Appellant and Shri Roopam Kapoor, Principal Commissioner, Authorized Representative for the revenue.
4.2 Arguing for the appellants learned counsel submitted that-
11 ST/174,345,466/2012 o Issue in respect of point to point transportation of passengers in bus is covered by the following decisions-
i. City Travels [2015-TIOL-1619]
ii. Benzy Travels [2017 (49) STR 535]
iii. A Manimegalal [2014 (330 STR 412]
iv. ABT Limited [2015 (38) STR 1157]
v. Ideal Travels [2012 (28) STR 257]
vi. Sharma Transports [2013 (29) STR 249]
vii. Han Travels [2016 (42) STR 94
o In their own case Commissioner (Appeal) has vide his order of 2016, allowed the benefit of exemption under notification 20/2009-ST for the period from 2002-03 to 2006-07. This order has been accepted by the department and not appealed against. Thus the benefit of notification 20/2009-ST has been allowed to them for period upto 2007 and thereafter from July 2009. There can be no reason for denying the same during intervening period. o The corrigendum issued to notification is part and parcel of the main notification. When the notification has been given retrospective effect, the obvious conclusion is that corrigendum too has been given retrospective effect. [Polyplex Crop Limited [2014 (306) ELT 37 (ALL)] o The issue was also clarified in their favour Ministry of Finance (RU) vide DOF No 334/3/2011-TRU dated 28.02.2011. Such clarification should be given due weightage as held in Kajaria Ceramics Limited [2005 (191) ELT 20- (SC)] o In respect of 26 Contract carriages with them in para 68 of the impugned order Commissioner has observed that they have not proved that they have satisfied the condition No 12 of the license issued to them. There is no such allegation in the show cause 12 ST/174,345,466/2012 notice hence Commissioner has travelled beyond the scope of show cause notice.
o Further he has failed to establish that these contract carriages were used under a contract for fixed set of passengers and the vehicle has not been used for tourism, conducted tours, charter or hire services. They had produced a Certificate No TC/MS/D-1/Misc/2012 dated 10.02.2012 from transport Commissioner Maharastra, that the permits issued to the appellant for air conditioned and non air conditioned buses for transportation of passengers are contract carriage permits. They had submitted the schedule for point to point transportation of passengers on contract carriage basis and also copies of bus tickets. They have complied with all the conditions of the Motor Vehicle Act and the rules made thereunder. No action has been taken by the State Transport Authority for violation of any of the condition of license. o In respect of demand on Chartered Bus Services they have not provided any tour operator services but have let out buses on charter basis. The buses are under supervision, possession and control of charterer. Thus there is transfer of right to use the buses which is deemed sale in terms of Article 366 (29A) of the Constitution of India and hence no service tax could be demanded, in view of decisions as follows:
o Krishna Chandra Behera and Another [1991 (083) STC 0325 ORI] o Sri Ram [2009 (020) VST 0747 (ALL)] o HLS Asia Ltd [2007 (8) VST 314 (Gauhati)] o Rashtriya Ispat Nigam Limited [2002 (3) SCC 314} o BSNL [2006 (3) STT 245 (SC)]
13 ST/174,345,466/2012 o Since providing the buses to charterer is not covered under tour operator services the demand made in respect of this cannot be sustained. o Demand made in respect of Advertisement Services cannot be sustained as there is no such head. While Show Cause Notice proposed the demand under "Advertising Agency" service, Commissioner has confirmed the demand under "sale of space or time for advertisement" service. A new case cannot b made out against them at the adjudication stage. o Since they have paid the entire service tax along with interest, penalty should be set aside. o The demand is hit by limitation, as they were under bonafide belief that they were not required to pay service tax under category of tour operator service. The issue was an industry wide issue. They had along with All India Tourist Bus Operators Association made representation to the ministry for issuance of clarification/ exemption. The Ministry had vide letter dated 04.11.2009 clarified that issue is under active consideration. Subsequently a retrospective exemption notification has been issued.
o Since the issue involved is purely legal one, and is purely of interpretation of statutory provisions. They had not collected the service tax from their customers and maintained regular book of accounts in usual manner. Hence, no penalty could have been imposed in terms of Section 80 [Flyingman Air Courier (P) Ltd [2004 (170) ELT 417 and Gamma Consultancy (P) Limited [2006 (4) STR 591 (T)] o They rely on all the grounds taken by them in the appeal filed.
4.3 Arguing for the revenue learned Authorized Representative submitted that-
14 ST/174,345,466/2012 o The appellants are providing taxable services under the category of "Tour Operator Services" in as much as they are operating "Contract Carriages" for interstate and intrastate transportation of passengers on point to point to point basis. o The issue raised in the present appeal are squarely covered by the following decisions:
o Secy Federn of Bus Operators Assn of T N [2006 (2) STR 411 (MAD)] o A P State Road Transport Corporation [2018 (8) GSTL 441 (T-Hyd)] o Alok Prakash [2018 (8) GSTL 266 (ALL)] o V K Rakesh, R R Travels [2016-TIOL-1706-HC-
Ker-ST] o Hans Travels [2016 (42) STR 94 (T-Del)] o The claim of appellants that the services provided by them have been exempted retrospectively from 01.04.2000 by Notification No 20/2009-ST read with the Corrigendum issued to the notification ad Section 72 of the Finance Act, 2011 is not correct in law. o While notification No 20/2009 read with the Corrigendum dated 31.08.2009 exempts the "taxable service referred to in sub clause (n) of clause (105) of Section 65 of Finance Act, provided or to be provided to any person, by a tour operator having a contract carriage or tourist vehicle with a permit for inter-state or intrastate transportation of passengers, excluding tourism, conducted tours, charter or hire service", only the services provided by using contract carriage permit have been exempted retrospectively and not the services provided by "tourist vehicle with permit". Thus the benefit of exemption would be admissible to the appellants prospectively and shall not be admissible retrospectively with effect from 01.04.2000 15 ST/174,345,466/2012 o Referring to para 6.1 of D O F No 334/13/2009-TRU dated 6th July 2009 he explained that intention of the exemption notification No 20/2009-ST, that said notification was issued to bring on parity the services provided by the private bus operator using busses having 'contract carriage' permit for transportation of passengers on specific interstate or intrastate routes with State Undertaking bus with "Stage Carriage Permit" on the same route. The purpose of the said notification was not to exempt the services provided by the tour operators providing services in relation to tourism or conducted tours or charter or hire. o Tour operator as defined by clause (115) of Section 65 of the Finance Act , 1994, "means any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours in a tourist vehicle or contract carriage by whatever name called, covered by a permit, other than a stage carriage permit, granted under the Motor Vehicle Act, 1988 or the rules made thereunder."
o Since appellants are engaged in the business of operating tours in a tourist vehicle or contract carriage by whatever name called, covered by permit other than stage carriage permit, they are covered by the definition of tour operator. Since during the relevant period the services provided by them were taxable and not exempted, order of Commissioner confirming the demands against the appellant cannot be faulted with.
o Appellants have provided tour operator services (Chartered Bus Services) in respect of these services provided there is no dispute with regard to leviability 16 ST/174,345,466/2012 of service tax and no exemption is also available. In fact appellants have been collecting service tax from their clients in respect of these services but were not paying the same to government account. o Appellants had been providing the advertisement services in as much as they allowed the advertisements to be displayed inside their buses against the charges for displaying the same. Such services of displaying the advertisement clearly fall under the taxable category of sale of space or time for advertisement services and hence liable to service tax.
o Extended period of limitation has been rightly invoked as appellants have during the material period not filed any service tax returns. In fact they were filing the returns earlier but suo motto stopped filing the same from 1.04.2007. They had also failed to take registration in respect of advertisement services provided by them.
o Penalties and interest demands to arte justified in view of the failure of appellant to pay the service tax by the due date and comply with procedural requirements/ obligations cast on them.
5.1 We have considered the impugned order along with the appeal and submissions made during the course of arguments.
5.2 The demands made on the appellants can be put in three categories viz (a) Tour Operator Services (Chartered Bus Booking) (b) Tour Operator Service (Point to Point Bus Service) & (c) Advertisement Services.
Taxability under the category of Tour Operator Services [category (a) & (b)] 5.3 In case of Ideal Travels [2012 (28) STR 257 (T- Bang)] following has been held:
17 ST/174,345,466/2012 "9. We have given careful consideration to the submissions. After examining the definitions of "tour" and "tour operator" under Section 65 of the Finance Act, 1994, we note that the term "tour" always meant a journey from one place to another irrespective of the distance between such places and that "tour operator" always meant or included a person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 or the rules made thereunder. The definition of "tour operator" was widened w.e.f. 10-9-2004 to mean any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sight-seeing or other similar services) by any mode of transportation. The meaning of tour operator was further expanded w.e.f. 16-5-2008 by including (in addition to tourist vehicle) a contract carriage (by whatever name called) covered by a permit, other than a stage carriage permit, granted under the Motor Vehicles Act, 1988 or the rules made thereunder. From these provisions, it would become abundantly clear that the activities of the assessees who are before us fell within the definition of "tour" and accordingly the assessees fell within the ambit of "tour operator" defined from time to time. Therefore, the arguments made on behalf of the assessees to the effect that they were only transporting passengers and not operating any "tour" are not acceptable. It is not in dispute that they were transporting passengers who were undertaking journey from one place to another irrespective of the distance between such places. In other words, the passengers were touring in the buses of the assessees. These buses were "tourist vehicles" within the meaning of this term defined under Section 65 of the Finance Act, 1994 read with Section 2(43) of the Motor Vehicles Act, 1988. Indisputably, the assessees were engaged in the business of operating 18 ST/174,345,466/2012 "tours" in tourist vehicles covered by permits granted under the Motor Vehicles Act, 1988 or the rules made thereunder. As they were running the buses on predetermined routes in scheduled hours under such permits, they can be held to have undertaken the business of planning, scheduling, organizing or arranging tours. In other words, the assessees are squarely covered by the main part of the definition of "tour operator" under Section 65(115) of the Finance Act, 1994 w.e.f. 10-9-2004. We note that the meaning of "tour operator" assigned by Parliament prior to 10-9-2004 continued on the statute took as it stood incorporated in the inclusive part of the definition of "tour operator" from 10-9-2004. The assessees who were engaged in the business of operating tours in tourist vehicles covered by permits granted under the Motor Vehicles Act, 1988 or the rules made thereunder were covered by this meaning of "tour operator" also. The findings recorded by the authorities below on the taxability of the assessees' activities are well-founded. The assessees have no case on merits."
5.4 In case of Hans Travels [2016 (42) STR 94 (T-Del)] following has been held-
"4. As regards remaining demand under tour operator service, it is a fact that the appellant was granted licence to operate buses as contract carriages and not as stage carriages. The contention of the appellant that it operated its buses as stage carriages does not alter the category of its buses from contract carriages to stage carriages. Tour is defined under Section 65(113) ibid as under : -
"Tour means a journey from one place to another irrespective of the distance between such places."
Tour Operator is defined under Section 65(115) ibid as under : -
"Tour Operator means any person engaged in the business of operating tours in a tourist vehicle covered by a permit 19 ST/174,345,466/2012 granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made thereunder;"
With effect from 10-9-2014, the said definition reads as under : -
"Tour Operator" means any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sight-seeing or other similar services) by any mode of transport and includes any person engaged in business of operating tours in a tourist vehicle covered by a permit under the Motor Vehicles Act, 1988 or the rules made thereunder;"
A tourist vehicle is defined under Section 65(114) read with Section 2(43) of Motor Vehicles Act, 1988 as under:-
"Tourist vehicle" means a contract carriage constructed or adapted and equipped and maintained in accordance with such specifications as may be prescribed in this behalf;"
Thus, it would appear that the impugned service rendered by the appellant using a contract carriage would fall under the category of tour operator service. Indeed in the case of M/s. Ideal Travels & Others v. CCE, Mangalore [2011- TIOL-1850-CESTAT-BANG = 2012 (28) S.T.R. 257 (T)], CESTAT rejected a similar contention (that the service provided did not fall under the ambit of tour operator service). However, CESTAT in that case remanded the matter with the following words : -
"10. However, their alternative plea for the benefit of Notification No. 20/2009-S.T., dated 7-7-2009 read with corrigendum dated 31-8-2009 merits consideration. The said Notification granted full exemption from payment of service tax on the taxable service referred to in Section 65(105)(n) of the Finance Act, 1994, provided by a tour operator having contract carriage permit or tourist vehicle permit for inter-State or intra-State transportation of passengers, excluding tourism, conducted tours, charger 20 ST/174,345,466/2012 or hire services. Parliament extended the exemption retrospectively upto 1-4-2000 vide Section 75 of the Finance Act, 2011. Prima facie, all the assessees before us are entitled to the benefit inasmuch as the impugned demands are for the period from April, 2000. The adjudicating authorities will have to examine their claim for exemption on merits, untrammelled by our prima facie view."
It is to be noted that in the above (Ideal Travels) case, CESTAT categorically stated that the adjudicating authority was to examine the applicability of Notification No. 20/2009-S.T., dated 7-7-2009 on merits and should not be influenced by prima facie views expressed by it (i.e., the Tribunal)."
5.5 In respect of the demand made under category of Tour Operator Chartered Bus Services, appellants had contested the demand stating that they have provided the bus to charterer. The transfer of right to use the bus is a deemed sale in terms of Article 366 (29A) and can be taxed only under entry 54 of the State List. They have placed reliance on a various decisions in this respect. Commissioner has in para 71 to 77 of his order considered the submissions by the Appellant in his order and recorded as follows:
"71. The department's contention appears to be correct as the Government made its intention clear to include the Chartered Bus Service in the taxable Tour Operators Service by specifically excluding the same in the Exemption Notification.
72. The assessee in their reply dated 01.12.2011, on this issue has stated that they have given buses on charter basis to various customers. In such kind of arrangements buses are given to the customers along with drivers and cleaners and all expenses relating thereto with regard to diesel oil etc. is borne by them. Under the arrangement 21 ST/174,345,466/2012 buses are under the physical control and possession of the service receiver for the given period of time and the notice is only concerned with the hire charges.
73. In the chartered bus arrangement the assessee is neither concerned with any planning, scheduling etc. of tour for such customers. They simply provide the buses along with driver and cleaner to the customers who obtain required permits from the Transport Authorities for transportation of passengers. The customers then use the bus for required purposes i.e. transfer of right to use bus, wherein the possession and effective control of the bus is transferred to the customers and then the customers with the help of driver and cleaner use the bus for its desired purpose i.e. transportation of passengers. According to the assessee such kind of transportation are construed as deemed sale covered under Article 366 (29A)(d) of the Constitution of India i.e. transfer of right to use any goods for any purpose and only state government have power to levy tax on such transaction under entry 54 of the State List II. The assessee has cited various case laws to prove their point.
74. The term 'Transfer of right to use' was examined by the Hon'ble Supreme Court of India in the case of State of Andhra Pradesh & Anr. Vs M/s. Rashtriya Ispat Nigam Ltd. (2002) 3 SCC 314. In this case, the respondent, owners of Visakhapatnam Steel Project, allotted different works to contractors for the purpose of their steel project. They undertook to supply sophisticated machinery to the contractors for the purpose of being used in execution of the contracted works and received charges for the same.
The appellant made provisional assessment levying sales tax on hire charges under Section 5-E of the AP VAT Act. The respondent filed a Writ Petition seeking declaration that the tax levied by the VAT Authorities was illegal and unconstitutional. In para 3 while examining the question as to when a transaction would amount to transfer of right 22 ST/174,345,466/2012 to use goods, the Hon'ble Court upheld the decision of High Court of Andhra Pradesh and observed as under:
a ..... that the transaction did not involve transfer of right to use the machinery in favour of contractors. The High Court was right in arriving at such conclusion. In the impugned order, it is stated, and rightly so in our opinion, that the effective control of the machinery even while the machinery was in use of the contractor was that of the respondent company; the contractor was not free to make use of the machinery for the works other than the project work of the respondent or move it out during the period the machinery was in his use; the condition that the contractor would be responsible for the custody of the machinery while it was on the site did not militate against respondent's possession and control of the machinery.
75. The Hon'ble Supreme Court of India in the case of Bharat Sanchar Nigam Ltd. v. Union of India [2006] 3 STT 245 (SC), eloquently described the determinative test to decide the nature of transaction in the cases of transfer of the right to use and held as under:
87. To constitute a transaction for the transfer of the right to use the goods the transaction must have the following attributes :
a. There must be goods available for delivery;
b. There must be a consensus ad idem as to the identity of the goods;
c. The transferee should have a legal right to use the goods- consequently all legal consequences of such use including any permissions or licenses required therefore should be available to the transferee;
d. For the period during which the transferee has such legal right, it has to be the exclusion to the transferor this is the necessary concomitant of the plain language of the statute - viz. a "transfer of the right to use" and not merely a licence to use the goods;
e. Having transferred the right to use the goods during the period for which it is to be transferred, the owner cannot again transfer the same rights to others.
76. In short, the transaction is treated as transfer of 'right to use goods' and deemed sale, only when the entire elements as mentioned above are present.
23 ST/174,345,466/2012
77. Transfer of right to use any good is leviable to sales tax / VAT as deemed sale of goods under article 366(29A)(d) of the Constitution of India, if the transfer of right to use involves transfer of both possession and control of the goods to the user of the goods. Transaction of allowing another person to use the goods, without giving legal right of possession and effective control, not being treated as sale of goods, is only treated as service or services provided in relation to supply of goods, brought under the levy by the union. Transfer of right to use any goods can be treated as deemed sale and chargeable to VAT only if there is legal transfer of possession and effective control whereas in the instant case there is no legal transfer of right of possession and effective control and therefore it is a service and is chargeable to service tax."
5.6 The argument advanced by the appellants have been considered by the Hon'ble High Court of Madras in case of Secy Federn of Bus Operators Assn of TN [2006 (2) STR 411 (Mad)]. Hon'ble High Court of Madras held as follows:
"80. Mr. Chandrasekaran, learned Senior Counsel for the respondents contended and in our opinion rightly that from the language of entry 56, which entry was being pressed into service by Mr. Prakash, learned Counsel appearing on behalf of the petitioners, the tax had to be directly on the passengers carried by the road. In the present case, such is not the position. Learned Counsel pointed out that the petitioners were trying to fix the nature of the tax on the basis of its "measure". Mr. Chandrasekaran argues that in reality the argument in respect of entry 56 is based on the language of Section 67(m) and (n). He points out that as the "gross amount" charged from the customers or passengers is the value of the "taxable service" according to these sections. Therefore, it is being urged by the petitioners that in reality it is a tax on passengers. The learned Counsel argues that a basic error is being 24 ST/174,345,466/2012 committed in this and that is the "nature of the tax" is being decided on the basis of the "measure of the tax". He points out that provisions in Section 67(m) and (n) are the measures of the tax and the "measure of the tax" could never be used for deciding the nature of the tax. The learned Counsel relies on the celebrated decision reported in A.I.R. 1961 S.C. 1480 (Sainik Motors case), cited supra, and points out that the principle in that case has been followed throughout right up to the decision in Federation of Hotels and Restaurants case, cited supra, wherein in paragraph 17, the Supreme Court held as under :
"The subject of a tax different from the measure of the levy. The measure of the tax is not determinative of its essential character or of the competence of the Legislature. In Sainik Motors v. State of Rajasthan (1962) 1 SCR 517; A.I.R. 1961 S.C. 1480, the provisions of a State law levying a tax on passengers and goods under entry 56 of List were assailed on the ground that the State was, in the guise of taxing passengers and goods, in substance and reality taxing the income of the stage carriage operators or, at any rate, was taxing the "fares and freights", both outside of its powers. It was pointed out that the operators were required to pay the tax calculated at a rate related to the value of the fare and freight. Repelling the contention, Hidayatullah, J., speaking for the Court, said (at p. 1484 of A.I.R. 1961 S.C.):
"....we do not agree that the Act, in its pith and substance, lays the tax upon income and not upon passengers and goods. Section 3, in terms, speaks of the charge of the tax "in respect of all passengers carried and goods transported by motor vehicles", and though the measure of the tax is furnished by the amount of fare and freight charged, it does not cease to be a tax on passengers and goods ...."
The learned Senior Counsel also invited our attention to the decision reported in A.I.R. 1974 S.C. 436 (A.S. Karthikeyan v. State of Kerala) where the decision of 25 ST/174,345,466/2012 Sainik Motors case was followed to explain the "nature of entry 56". From the observations of the Supreme Court in paragraph 28 of Karthikeyan case, it is clear that the present tax, which is a tax on service, is entirely "distinct and independent" and cannot be covered by entry 56.
81. We have already held that this tax, in so far as it pertains to the "rent-a-cab scheme operators" or "tour operators", cannot come under "profession, trade or calling". In that behalf, we rely on the celebrated decision of the Apex Court in Federation of Hotels and Restaurants case, cited supra.
82. In Federation of Hotels and Restaurants case, cited supra, the Apex Court was considering the "legality" and "legislative competence" of the tax levied by the Parliament on the "expenditure". The impugned Act was "Expenditure Tax Act, 1987" which envisaged a tax at 10% ad valorem on the chargeable expenditure incurred in the class of hotels wherein the room charges for any unit of residential accommodation are four hundred rupees or more per day per individual. The term "chargeable expenditure" was defined by Section 5 of that Act and included the expenditure incurred in or payments made in such class of hotels in connection with the provisions of any accommodation, residential or otherwise; or food or drink by the hotel, whether at the hotel or outside, or by any other person at the hotel; or any accommodation in such hotel on hire or lease; or any other services envisaged in that section. The challenge was on the ground that this tax, which was being imposed under Entry 97 of List-I under Article 248 of the Constitution of India was beyond the legislative competence as in fact, this expenditure tax was squarely covered under Entry 62 of List-II which pertained to the taxes on luxuries, including taxes on entertainments, amusements, betting and gambling and also could be covered under entry 54 of List- II as the transaction in question also amounted to "sale of 26 ST/174,345,466/2012 food stuff (goods)" to the customers. The Supreme Court upheld the validity of the levy of the tax. The Supreme Court accepted that the said tax could have and had "distinct aspects".
83. The Apex Court recognised the said "distinct aspect". viz., the "expenditure aspect" of the transaction and held the same to be falling within the "Union Power". It held that that aspect had to be distinguished from the aspect of luxury or sale of goods. The following observations in paragraph 19 are apposite :
"The submissions of the learned Attorney General that the tax is essentially a tax on expenditure and not on luxuries or sale of goods falling within the State power, must, in our opinion, be accepted. As contended by the learned Attorney General, the distinct aspect namely, the expenditure aspect of the transaction falling within the Union power must be distinguished and the legislative competence to impose a tax thereon sustained. ... ... ..."
84. The decision in Federation of Hotels and Restaurants case is clear that even if the tax is on account of the business or calling or trade of the tax-payer, i.e. of running a cab agency or conducting tours by using tourist vehicles or taxis, the tax is on the distinct aspect of service provided by him and, therefore, the argument that this falls under entry 60 of List-II is clearly incorrect and has to be rejected. This challenge by the "rent-a-cab scheme operators", which also is applicable to the "tour operators"
viz. "state carriage operators", "contract carriages operators", "cab/maxi cab operators" has absolutely no basis and would have to be rejected."
5.6 Thus we do not find any merits in the submissions made by the appellants with regard to taxability of the services rendered by them under the category of "Tour Operator Services"
27 ST/174,345,466/2012 Admissibility of Exemption Under Notification No 20/2009-ST as amended by the corrigendum dated 31.08.2009.
5.7 Notification No 20/2009-ST dated 07.07.2009 ,as amended by Notification No GSR 622(E) Dated 31.08.2009 is reproduced below:
"In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) (hereinafter referred to as the Finance Act), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service referred to in sub-clause (n) of clause (105) of section 65 of the Finance Act, provided or to be provided to any person, by a tour operator having a [contract carriage or tourist vehicle with a permit ]1 for inter-state or intrastate transportation of passengers, excluding tourism, conducted tours, charter or hire service, from whole of the service tax leviable thereon under section 66 of the said Finance Act."
5.8 Explaining the intent of Notification, JS(TRU), has vide his letter issued vide D O F No 334/13/2009-TRU dated 6th July 2009, stated in para 6.1 as under:
"6.1 Private bus operators, who operate buses on specific inter-state or intra-state routes, are required to pay service tax as they ply their buses having 'contract carriage permits' and thus fall within the definition of tour operators. On the other hand the State Undertakings run buses, which run on the same route carrying passengers, are not subjected to service tax as these buses bear 'stage carriage permit'. In order to bring parity between the two, the services provided by the tour operators undertaking point-to-point transportation of passengers in a vehicle bearing contract carriage permit is being fully exempted from service tax, provided such transportation is not in 1 Prior to the corrigendum dated 31.08.2009 it read as "contract carriage permit"
28 ST/174,345,466/2012 relation to tourism or conducted tours, or charter or hire. (Notification No. 20/209-ST dated 07.07.09 refers). "
5.9 On the dated when the Notification No 20/2009-ST i.e. 07.07.2009, the exemption notification granted exempted only in respect of services provided by the tour operator having a contract carriage permit, and not by a tour operator having tourist vehicle with permit. It was only subsequently by corrigendum dated 31.08.2009, that exemption was granted to the tour operators having a tourist vehicle with the permit. It is also clear from the plain reading of notification date 07.07.2009, that there is no intention to grant the exemption with retrospective effect. The same thing has been stated in the TRU letter dated 06.07.2009.
5.10 Hon'ble Allahabad High Court has in case of Polyplex Corporation [] held as follows, while interpreting a amending notification, issued as "corrigendum":
"7. So it clearly says that it is a corrigendum to Notification No. 93/2004-Cus., dated 10-9-2004. It is not an amendment or modification or alteration in the earlier notification so as to make a change therein as such but when the author of a document makes a correction, it relates back to the date of initial authoring for the reason that correction means whatever written was not correct or there was some mistake which need be corrected. A correction or corrigendum precedes an inherent admission on the part of the person making correction/issuing corrigendum that the initial document or initial authored material has some mistake and admitting this mistake the same is being rectified/corrected and hence a correction/corrigendum.
8. Normally the word "corrigendum" is used when correction is made in a printed matter which has already disclosed to public and, therefore, mere handwritten correction or draft or finalized matter would not be 29 ST/174,345,466/2012 sufficient but correction as such has to be notified separately and that is how it is termed corrigendum.
9. The meaning of "corrigendum" is "an error to be corrected especially an error in print". The word "corrigenda" is used in a list of corrections of errors in a book or other publications. The origin of the word "corrigendum" is said to be from Latin from the phrase, "neuter of corrigendus, gerundive of corrigere to correct".
10. In various dictionaries also the word "corrigendum" has been defined.
11. In "Oxford Advanced Learner's Dictionary"
Seventh Edition at page 343 word "corrigendum" is defined "something to be corrected, especially a mistake in a printed book".
12. In "The Concise English Dictionary", 1982 Edition, page 253 meaning of "corrigendum" is "an error needing correction, esp. in a book".
13. In "Black's Law Dictionary" Eighth Edition at page 370, meaning of "corrigendum" is, "an error in a printed work discovered after the work has gone to press".
14. In "Legal Dictionary" along with Foreign Words and Maxims including Latin Maxims by Prafulla C. Pant, Second Edition, Reprint 2007, at page 118, the meaning of "corrigendum" is, "a thing to be corrected, esp. an error in a printed book".
15. This Court has also considered the nature of corrigendum in Commissioner, Sales Tax, U.P., Lucknow v. Dunlop India Limited, 1994 (92) STC 571 and said :
"In my opinion, Notification No. 4841 is in the nature of a correction (corrigendum) and, therefore, it dates back to the date of the notification corrected thereby, namely, June 11, 1974, on which date Notification No. 3867 was issued. A correction is a correction only when it dates back to the original order or the proceeding as the case may be.
30 ST/174,345,466/2012 It ceases to be correction if it is effective from the date of its issuance; it then becomes an amendment. This intrinsic nature of concept of correction cannot be lost sight of."
16. The Apex Court has also observed in State of Rajasthan and Another v. J.K. Udaipur Udyog Ltd. and Another, (2004) 7 SCC 673 that the use of word "corrigendum" indicates the intention of correction and to rectify that the State Government thought had been erroneously done.
17. Taking this view a learned Single Judge in Jubilant Organosys Ltd. v. Assistant Commissioner of Central Excise, Mysore-III, 2012 (276) E.L.T. 335 (Kar.) has also said :
"A corrigendum is nothing but a correction and it relates back to notification itself."
18. I may notice here that even in the matter of statutes whenever a subsequent provision is made with a specific and clear purpose of supplying an obvious omission in the former statute, the subsequent one has been held to relate back to the time when previous one was enacted. In the context of clarificatory provisions this principle has also been followed.
19. In Government of India v. Indian Tobacco Association, 2005 (187) E.L.T. 162 the Supreme Court in para 27 of the judgment observed :
"27. There is another aspect of the matter which may not be lost sight of. Where a statute is passed for the purpose of supplying an obvious omission in a former statute, the subsequent statute relates back to the time when the prior Act was passed [See Attorney General v. Pougette - (1816) 2 Price 381 = 146 ER 130]"
20. It is true that an exemption notification must be given a strict meaning. [See Tata Iron & Steel Co. Ltd. v. State of Jharkhand and Others, (2005) 4 SCC 272 and on 31 ST/174,345,466/2012 Commissioner of Central Excise, Chandigarh-I v. Mahaan Dairies, (2004) 11 SCC 798 = 2004 (166) E.L.T. 23]. But here it is not the case of application of an exemption notification itself but the effect of corrigendum notification issued in respect of an earlier exemption notification admitting apparent omission therein necessitating the issuance of correction/corrigendum notification. Therefore, principle applied herein would be different."
5.11 Thus taking note of fact that, the rectification in the Notification was made by issue of a corrigendum issued and also the decision of the Hon'ble Allahabad High Court referred in para 5.10, supra we are of the view that exemption has been granted in respect of services provided by the "contract carriage or tourist vehicle with permit" in respect of the services specified in the said notification from the date of effect of notification.
Retrospective Effect to the Notification 20/2009-ST.
5.12 Section 75 of the Finance Act, 2011 reads as follows:
"75. (1) The notification of the Government of India in the Ministry of Finance (Department of Revenue) number GSR 492(E), dated the 7th July, 2009, issued in exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), granting exemption from the whole of service tax leviable under section 66 of that Act to any person by a tour operator having a contract carriage permit for inter-State or intra-State transportation of passengers, excluding tourism, conducted tour, charter or hire service, shall be deemed to have, and deemed always to have, for all purposes, validly come into force on and from the 1st day of April, 2000, at all material times."
5.13 Thus by Section 75 of Finance Act, 2011, the date from which said notification No 20/2009-ST dated 7th July 2009 would have come into effect has been declared as 1st April 2000. Revenue has in their submission specified that this Section is silent in respect of the corrections made to 32 ST/174,345,466/2012 notification by the corrigendum dated 30.08.2009, and again uses the phrase "contract carriage permit" the intention of legislature was not to give the retrospective effect from 1st April 2000, to the exemption granted in respect of services provided by "tourist vehicle with permit". Thus when the wordings of the Section 75 of the Finance Act, 2011 are unambiguously granting retrospective exemption only in respect of service specified and provided by tour operators with "contract carriage permit", the said phrase cannot be interpreted to mean the phrase "contract carriage or tourist vehicle with permit", on the basis of the wordings used in the Notification No 20/2009-ST dated 7th July 2009 as corrected by corrigendum dated 31.08.2009.
5.13 We do not find force in the submissions made by revenue.
i. In the explanatory memorandum, explaining the provisions of Finance Bill, 2009, on page 23, para IV (2) it has been stated:"Retrospective effect is being given to notification No 20/2009-ST dated 07.07.2009exempting service tax on inter-State or intra-State transportation of passengers in a vehicle having Contract Carriage permit or a tourist vehicle permit for the period from 01.04.2000 to 06.07.2009."
ii. Similarly JS (TRU-II) has vide his DOF No 334/3/2011-TRU dated 28.03.2011, which is also the part of budget documents in para 12.7 stated as follows:
"12.7 Exemptions with retrospective effect have been given by the Finance Bill:
(a) .......; and
(b) To inter-state or intra-state transportation of passengers, in a vehicle bearing contract carriage 33 ST/174,345,466/2012 and tourist vehicle permit for the period from 01.04.2000 to 06.07.2009"
5.14 In our view the explanatory memorandum to the Finance Bill 2011 and JS(TRU-II) D.O letter clearly bring out the intention of the Section 75 of the Finance Act, 2011. The intention was to extend the benefit of exemption retrospectively in respect inter-state or intra- state transportation of passengers, in a vehicle bearing contract carriage and tourist vehicle permit for the period from 01.04.2000 to 06.07.2009.
5.15 Same view has been expressed by the tribunal in series of judgment referred to by the appellants and sated by us in para 4.2, supra.
5.16 Commissioner in para 66 to 68 of his order after examining the definition of "Contract Carriage" has observed as follows:
"66. Thus, the essential ingredient of a contract carriage is that it should be a motor vehicle which plies under a contract for a fixed set of passengers, and does not allow any other passenger to board or alight from the carriage at will. Tourist Vehicle can be treated as Contract Carriage if it satisfies the above condition.
67. Now the question comes whether the service provided by the assessee falls in the category of service provided by a 'tour operator having a contract carriage with a permit for inter-state or intrastate transportation passengers". Shri Sunil Savala, the partner in M/s. Neeta, has stated in his statement dated 01.07.2010, recorded under Section 14 of the Central Excise Act, 1944, read with Section 83 of the Finance Act 1994, that they are operating buses registered under the permit of Tourist Vehicles which transported passengers from Mumbai to various destinations.
68. Further from the various documents produced by the representative of the notice during the course of 34 ST/174,345,466/2012 investigation to the investigating officer and from the statement by Shri Sunil Savla, partner of M/s. Neeta, recorded under section 14 of Central Excise Act 1944, read with Section 83 of Finance Act 1994, on 27.07.2010, the department has arrived at the conclusion that M/s. Neeta have got a permit for their buses from the transport authorities as per the provisions of Motor Vehicles Act, 1988 to operate them as Tourist Vehicles. The assessee have not contested the department's conclusion. Although the assessee have submitted, vide their letter dated 02.01.2012 (received on 03.01.2012), some documents suggesting that M/s. Neeta have got permit for their 21 buses as 'Tourist Bus' to operate in Maharashtra State and All India (except Himachal Pradesh and Chandigarh) and permit for 26 buses as 'Contract Carriage' from transport authority to operate in Maharashtra State and in some cases it is only for Mumbai area. As far as vehicles with permit to operate as Tourist Bus are concerned, the exemption is not available. As regards the vehicles with permit to operate as Contract Carriage, it is seen that the Permits for Contract Carriages are issued with some attached conditions. However the assessee have failed to produce any document to prove that they have fulfilled the conditions for Contract Carriage Permit especially the condition at Sr.No.12 which reads as follows:
"The permit holder shall offer his vehicle for hire or reward only under contract expressed or implied for the use of the vehicle as a contract carriage only as defined under the Act and except for a reasonable cause no intending passengers shall be refused to be carried."
Also they have failed to prove that the vehicles are used as contract carriages under a contract for a fixed set of passengers and the vehicle has not been used for tourism, conducted tours, Charter or hire service. Thus under the circumstances I have got no option but to reject the assessee's claim and hold that the exemption is not 35 ST/174,345,466/2012 available to the Tourist Vehicles with a permit to operate as TOURIST BUS assessee is liable to pay service tax on the Point to Point Bus Service as mentioned in the show cause notice."
5.17 Then artificial distinction sought to be drawn by the Commissioner in his order is contrary to express intention of the Section 75 of Finance Act, 1994. Thus the order of Commissioner to this extent cannot be upheld.
5.18 In respect of the Services provided in category of Chartered Bus Booking, we find that these services fall within the exclusion category in the said notification. No other exemption has been pointed out which exempts such services. By putting these services under exclusion category in the Notification it is clear that these category of taxable services are not being exempted.
Taxability under the category of Advertisement Services [category (c)] 5.19 Para 6 (iv) of the of the Show Cause Notice reads as follows:
"6(iv) had also provided advertisement services during the period 2007-08 to 2009-10 and received amount, detailed in Annexure C to this notice, by displaying advertisements of various clients inside their buses but had not declared and added this service in their registration certificate, issued under Section 69 of the Finance Act, 1994 read with Rule 4 of Service Tax Rules, 1994. Neither had they made the payment of Service Tax thereon nor filed the ST-3 returns."
5.16 Para 7(iv) reads as follows:
"7. The scrutiny and investigation of the records revealed that:
i-iii. .........
36 ST/174,345,466/2012 Iv although they were also rendering as mentioned in para 6(iv) advertising services, they had failed to declare and add this service in their registration certificate issued under section 69 of the Finance Act, 1994 read with Rule 4 of Service Tax Rules, 1994."
5.17 Para 9(iii) & (iv) reads as follows:
"9. Following are the provisions of the Finance Act, 1994 and Service Tax Rules, 1994 in so far as they relate to the omissions and commissions of M/s Neeta Tour i.
ii.
iii. As per Section 65(3) of Finance Act, 1994, "advertising agency" means a person engaged in providing any service connected with the making, preparation, display or exhibition of advertisement an includes an advertising consultant.
iv. Section 65(105)(c) of the Finance Act, 1994 defines 'taxable service' to any person by an advertising agency in relation to advertisement in any manner.
v. ........"
5.20 From the above paragraphs in show cause notice it is evident that the demand made by the show cause notice on advertisement services related to taxable services defined in the taxable category of "advertisement agency services". Commissioner has considered the issue by considering the demand under the taxable category defined by Section 65(105)(zzzzm) viz "sale of space or time for advertisement". He has after referring to the submissions made and definition as provided by Section 65(105)(zzzzm), held the tax to be demandable in that category. Clearly Commissioner has travelled beyond the show cause notice. Since no demand has been made in the show cause notice under this category we are not in 37 ST/174,345,466/2012 position to sustain the order of Commissioner in this respect.
5.21 Thus in view of our discussions as above while we are in agreement with the demands made in respect of Chartered Bus Services, we do not find any merits in the order of Commissioner in respect of demands under other two categories.
Limitation, Interest and Penalty:
5.22 Now coming to the issue of Limitation. In respect of the demands made under the category of Chartered Bus Services, we do not find there was any legal dispute or the issue of interpretation. Further in Commissioner has in para 84 (v) of his order referred to statement of Shri Sunil Savia and stated "v. the had collected Service Tax from their customers from 2009 onwards on the Chartered Bus provided by them under tour operator's services but had not made the payment of Service Tax in the government account, which they shall make immediately after calculating the same." Further in para on the basis of scrutiny of various documents and statement of Shri Sunil Savia, he has in para 85(ii), stated that "they had neither made the payment of Service Tax nor filed ST-3 returns of chartered bus services falling under tour operator's service during the period 1.04.2007 to 31.03.2010. However, they had been charging and recovering Service Tax from their clients from 01.04.2009 onwards on their invoices for this service but not depositing the same with government."
5.21 In para 91 of his order after referring to order of tribunal in case of Karnataka Soaps [2010 (25) ELT 62 (T- Bang)], Century Tiles Ltd [2009 (236) ELT 583 (t-Ahmd)] and Sew Construction Ltd [2011 (022) ETR 666 (T-Del), Commissioner has concluded holding the charge of suppression against the appellants stating "In the present case also the assessee have not filled ST-3 returns during the period 2007-08 to 2009-10. They have filed the ST-3 38 ST/174,345,466/2012 Return for the period 2005-06 to 2006-07 and paid the service tax for the same period only after the case was booked against them. However from April 2007 on wards they have suddenly stopped filing ST-3 return without even informing or consulting with the department, they have also failed to declare and add Advertisement Services in the registration Certificate. Shri Sunil Savia, the partner in M/s Neeta, ahs also accepted in his statement that they have collected Service Tax from their customers from 2009 onwards on the Chartered Bus Service provided by them but had not made the payment in the Government Account and hence above judgments of Hon'ble CESTAT are squarely applicable in this case also."
5.22 In respect of limitation interest and penalties, Commissioner has in para 92, Commissioner sates "
Therefore it is established beyond doubt that in the present case there is suppression with intention to evade payment of service tax and thus the provisions of extended period have been rightly invoked which also render them liable to penalties under Section 76 & 78 of the Finance Act, 1994. Since there was short payment/ nonpayment, interest under section 75 of the Finance Act, 1994, comes into picture and is therefore chargeable from the noticee. Further, they are also liable to be penalized under Section 77 of the Finance Act, 1994 for contravention of provisions of Section 68 (for their failure to pay service tax), Section 69 (for their failure to take registration for the Advertisement Services rendered by them, under appropriate service category), Section 70 (their failure to file ST-3 Returns) and Section 73(A) for not depositing the Service Tax collected by the assessee from their clients with the Government Treasury."
5.23 We do not find any merits in the submissions made by the appellant against the order of Commissioner, in respect of limitation, interest and penalties. We only observe that the these charges can now be sustained only 39 ST/174,345,466/2012 in respect of the demands which can be sustained on merits i.e. in respect of the Chartered Bus Services.
Appeal No ST/466/2012 and Cross Objections ST/CO/112/2012 6.1 Appellants had filed five refund claims as detailed in table below claiming the refund of service tax paid by them during the period for which the refunds have been filed.
S Period Date of Date of Payment Amount' Rs
No Filing
1 2002- 17.10.08 16.08.06, 17.10.06, 7,94,291/-
03 17.10.06
2 2003- 17.10.08 22.07.04, 16.10.06, 43,39,305/-
04 17.10.06, 17.10.06,
17.10.06
3 2004- 17.10.08 26.07.04, 25.10.04, 46,69,028/-
05 12.07.05, 19.07.05,
20.07.05,
26.07.05,05.08.05,
25.08.05
4 2005- 17.10.08 02.12.05, 17.12.05, 89,82,464/-
06 27.12.05, 31.03.06,
11.05.06, 15.05.06,
12.02.06, 27.05.06,
29.05.06, 30.05.06
5 2006- 17.10.08 05.07.06, 03.04.07, 1,21,01,718/-
07 19.10.07, 31.10.07
6.2 After issuance of the Show Cause notice, and
following the principals of natural justice, Assistant
Commissioner rejected the refund claims filed by the appellant holding in his order as follows:
"4...... I find that M/s Neeta Tours and Travels are not eligible to the refund of service tax already paid or any exemption as claimed, in terms of Notification No 15/2007- ST dated 04.04.2007 issued under Section 11C of the Central Excise Act, 1944. I also observe with regard to the claim of assessee that payments are made under protest and hence time bar criteria is not applicable in the instant case, I find that assessee has failed to produce copy of any representation made with regard to the payments made under protest.. I also find from the copy of St-3 Returns for the relevant period and the statement showing the details of payment of service tax that assessee have 40 ST/174,345,466/2012 collected the gross amount inclusive of service tax as they have not produced any evidence to the fact that the same have not been recovered and also the receipts do not show any kind of tax levied. I, therefore, find that assessee have correctly made the service tax payment and the refund applied for is not allowed."
6.3 Thus the refund applications filed by the appellants have been rejected by the Assistant Commissioner holding them-
i. Not to be admissible on merits;
ii. Not admissible as filed beyond the period of limitation;
iii. The burden of the tax paid has been passed on.
6.4 Aggrieved by the order of Assistant Commissioner, appellants filed the appeal before Commissioner (Appeal). Relying on the decision of Apex Court in case of Mafatlal Industries Ltd [1997 (89) ELT 247 (SC)], and in case of M/s Sahakari Khand Udyog Mandal [Order Dated 09.03.2005 in Civil Appeals No 6832 & 6833 of 1999] Commissioner (Appeal) upheld the order of Assistant Commissioner.
6.5 Aggrieved by the order of Commissioner (Appeal) appellant have filed this appeal.
7.1 In their appeal, appellants have challenged the order of Commissioner (Appeal) stating that-
"i. The learned appellate authority has erred in law and in facts in not appreciating that, the appellant has not collected service tax from the passengers, and the payments for the period 2002-03 to 2006-07 were made under protest and subsequent to the amount received from service receiver and hence the doctrine of unjust enrichment is not applicable to them.
ii. The learned Appellate Authority has erred in law and in facts in not appreciating the submission of the appellant 41 ST/174,345,466/2012 wherein is has been stated that the refund claims were premature and therefore to keep the matter in abeyance till the application of refund claim filed in pursuance of Section 75 of FA, 2011 before Assistant Commissioner, Div-IV, Service Tax - II Mumbai.
iii. The refund claim filed in pursuance of Section 75 of FA, 2011 has been rejected by Assistant Commissioner, Div-IV, Service Tax II, Mumbai vide Order in Original No ST-II/DN-IV/277-R/2012 dated 15/03/2012 and the appellant has filed appeal before the Commissioner (Appeal)-IV, Central Excise against the said OIO on 25/04/2012.
iv. The appellant submits that, the grounds of Appeal in the above said appeal filed before Commissioner (Appeal)- IV, Central Excise on 25/05/2012 are reiterated in the present appeal also.
v. The appellant submits that, this is a protective Appeal filed by the appellant to reserve the right to contest OIA in case the final decision in the above said appeal filed before Commissioner (Appeal)-IV, Central Excise goes against them."
7.2 Arguing for the appellants learned counsel submitted that this appeal has become infructuous as the refund applications filed by them pursuant to the amendments made by the Finance Act, 2011 for the same period have been allowed by the Commissioner (Appeal in their favour. In para 1.2 of their written submissions they have stated, "Appeal No ST/466/2012 is appeal relating to refund of service tax paid by the appeal on account of point to point transportation of passengers in bus for the period from 2002-03 to 2006-2007. However the said appeal has become infructuous in view of the subsequent developments and consequent sanction of the refund amount to the appellant herein."
42 ST/174,345,466/2012 7.3 Arguing for the revenue learned authorized representative reiterated the findings of the lower authorities.
8.1 We have considered the submissions made in appeal, and during the course of arguments along with the impugned order.
8.2 The easiest course for deciding this appeal is to dismiss the appeal as infructuous on the basis of submissions made by the appellants. However we find that the issue on which the Commissioner (Appeal) has upheld the order of Assistant Commissioner in impugned order is not on the merits but on the grounds of limitation and the fact that the burden of amount claimed as refund has been passed on by the Appellants to the receiver of the services, hence refund fails to cross the bar of unjust enrichment.
8.3 In their ground of appeal or during the course of arguments or in the written submissions appellants have put forth any reasons to show that how the order of Commissioner (Appeal) is illegal in this respect. On the contrary appellants have in the ground of appeal at "i", supra {exact wordings taken from the ground of appeals in appeal memo} have admitted that they made the payment of service tax after collecting the amount of amounts from the service receiver.
8.4 In para 1.5 of their written submissions appellants have stated "1.5 Apart from the above, in the appellants own case, this view has been accepted by the department. The appellant had paid service tax for the period from 2002-03 to 2006-07 during July 2004 to October, 2007 without collecting the same from the customers. Thereafter, the appellants filed 5 refund claims as the service tax was paid under protest. The refund claim was rejected by the Assistant Commissioner vide order dated 22.05.2008. Being aggrieved, the appellant had filed appeal before the Commissioner of Central Excise 43 ST/174,345,466/2012 (Appeals) on 25.08.2009. The said appeal has been recently allowed vide order in appeal dated 28.04.2016 holding that the appellant is entitled for benefit of exemption under Notification No 20/2009-ST. The Commissioner (Appeals) has given detailed finding on the said issue at Para 10 to Para 15 thereof. The said refund claim was filed under section 75(2) of the Finance Act, 2011. The said order has been accepted by Committee of Commissioners vide F No V/ZST-VI/Hq/TRb/OIA Acceptance/16-17 dated 23.08.2016 (refer serial No 9 thereof). Pursuant to the same vide order in original no ST-VI/Mum/R-242/2016-2017 dated 30.11.2016, the refund of Rs 4,18,19,478/- has been sanctioned to the appellant. The said order has also been accepted as there is no appeal. The said order have become final. Hence a different stand cannot be taken by the department."
Nothing can be made out from the above submission the appeal filed by the appellant against the order in original rejecting the five refund claims filed by the appellant on 25.08.2009. The said appeal has been disposed by the Commissioner (Appeal) by the impugned order before us. When the Commissioner (Appeal) has disposed of the said appeal by the impugned order then which is the order passed in 2016. Secondly by the impugned order Commissioner (Appeal) has decided the issue against the appellants on ground that the burden of tax paid has been passed on to the recipient of services. Till the time this finding of Commissioner (Appeal) is set aside, the refund could not have been made to the appellants even in terms of retrospective amendment made by the Finance Act, 2009. Explanation appended to the said validation provision in Finance Act, 2011 reads as follows:
"Explanation.--For the removal of doubts, it is hereby declared that the provisions of section 11B of the Central Excise Act, 1944 (1 of 1944), shall be applicable in case of refunds under this section."
44 ST/174,345,466/2012 Thus the bar of unjust enrichment as enshrined in Section 11B still needs to be satisfied before the refund could have been paid to the appellant. The order of Commissioner (Appeal) holding that appellants have passed on the burden of the service tax paid on to the recipient of services has not been set aside in appeal before us. Then it is not understood how in subsequent proceedings in respect of same amounts Commissioner (Appeal) has held contrary. Matter needs to be investigated by the Chief Commissioner, because it is submission of the appellants before us that this appeal is infructuous as the amount claimed as refund by them has already been paid to them.
8.5 Hon'ble Supreme Court has in case of Mafatlal Industries [1997 (89) ELT 247 (SC)] held as follows:
"12.Chapter IIA comprises of four sections, Sections 12A to 12D. They read thus :
"12A. Price of goods to indicate the amount of duty paid thereon. - Not withstanding anything contained in this Act or any other law for the time being in force, every person who is liable to pay duty of excise on any goods shall, at the time of clearance of the goods, prominently indicate in all the documents relating to assessment, sales invoice, and other like documents, the amount of such duty which will form part of the price at which such goods are to be sold.
12B. Presumption that incidence of duty has been passed on to the buyer. - Every person who has paid the duty of excise on any goods under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such duty to the buyer of such goods.
12C. Consumer Welfare Fund. There shall be - (1) established by the Central Government a Fund, to be called the Consumer Welfare Fund.
45 ST/174,345,466/2012 There shall be credited to the Fund, in such manner as may (2) be prescribed, --
The amount of duty of excise referred to in sub-section (2)
(a) of section 11B or sub-section (2) of section 11C or sub-
section (2) of section 11D;
The amount of duty of customs referred to in sub-section (2) (b) of section 27 or sub-section (2) of section 28A, or sub-section (2) of section 28B of the Customs Act, 1962 (52 of 1962);
any income from investment of the amount credited to the
(c) Fund and any other monies received by the Central Government for the purposes of this Fund.
12D. Utilisation of the Fund Any money . - (1) credited to the Fund shall be utilised by the Central Government for the welfare of the consumers in accordance with such rules as that Government may make in this behalf.
The Central Government shall maintain or, if it thinks fit, (2) specify the authority which shall maintain, proper and separate account and other relevant records in relation to the Fund in such form as may be prescribed in consultation with the Comptroller and Auditor-General of India."
14.Though different provisions governed the subject of refund during different times, there is one feature uniformly common to them all, viz., they purport to be exhaustive on the subject of refund and they provide a period of limitation for making such claims. Rule 11, as it stood prior to August 6, 1977, not only carried the title "No refund of duties or charges erroneously paid unless claimed within three months", it provided specifically that no duties/charges "shall be refunded unless the claimant makes an application for such refund under his signature and lodges it to the proper officer within three months from the date of such payment or adjustment, as the case may be". Similarly, Rule 11, as it obtained between August 46 ST/174,345,466/2012 6, 1977 and November 16, 1980, provided that claims for refund shall be made "before the expiry of six months from the date of payment of duty". (Of course, this period of limitation did not apply where the duty was paid under protest.) Sub-rule (4) of Rule 11 provided in express terms that "save as otherwise provided by or under these rules, no claim for refund of any duty shall be entertained". The situation obtaining under Section 11B, as it stood during the period November 16, 1980 to September 19, 1991, was no different. Sub-section (1) provided that a claim for refund shall have to be filed "before the expiry of six months from the relevant date" and sub-section (4) provided in specific terms that "save as otherwise provided by or under this Act, no claim for refund of any duty of excise shall be entertained". Section 11B, as amended by 1991 (Amendment) Act, is similarly worded. Sub-section (1) now provides that a claim for refund has to be filed "before the expiry of six months from the relevant date"
and sub-section (3) declares in emphatic terms that "notwithstanding anything to the contrary contained in any judgment, decree, order or direction of the Appellate Tribunal or any court or any other provision of this Act or the rules made thereunder or any other law for the time being in force, no refund shall be made except as provided in sub-section (2)". Sub-section (2), it may be mentioned, provides the circumstances in which and the grounds on which a refund shall be made, or shall be denied, as the case may be. It is necessary to emphasise that the exclusivity of these provisions relating to refund - and conversely the bar to other proceedings created by them - is specific to the subject of refund and is apart from and in addition to the general bar implicit in the Act or expressed in some of its other provisions, as the case may be. Because the Act creates new rights and liabilities and also provides the machinery for assessment and adjudication of those rights and liabilities, a bar to the jurisdiction to civil
47 ST/174,345,466/2012 court arises by necessary implication - an aspect dealt with at some length later. [Also see Principle No. 3 enunciated in Kamala Mills Ltd. v. State of Bombay [1966 (1) S.C.R. 64] dealt with in Paras 30 to 33.] The point to be stressed is that the exclusive nature of the refund provisions expressly declared in Rule 11 and Section 11B, at all points of time, is an express and specific one contained in a special statute. It is not the usual finality clause found in several statutes; it is much more.
15.The validity of the aforesaid provisions (providing a period of limitation for making claims of refund and declaring that no refund claim shall be entertained except under and in accordance with the said provisions) has never been challenged seriously. Though in certain writ petitions now before us, validity of Section 11B (as amended in 1991) is challenged - which challenge is dealt with hereinafter and rejected - the main submission of Sri F.S. Nariman, leading the arguments on behalf of the appellants-petitioners has been that these provisions do not preclude the filing of a suit or the filing of a writ petition claiming refund where the tax has been collected contrary to law by virtue of Article 265 of the Constitution and that the question of passing on the burden of duty is totally irrelevant in the matter of refund. Once the provisions of the Act including the aforesaid provisions, viz., Rule 11 and Section 11B, as they stood from time to time, are taken as valid and effective, they constitute "law" within the meaning of Article 265. It may be remembered that the aforesaid provisions relating to refund have always been accompanied by and are complimentary to the provisions relating to recovery of duties legitimately due under law, but not collected. The recovery provisions also contained and do contain a corresponding period of limitation, i.e., three months or six months, as the case may be. This period of six months can be extended up to a maximum period of five years in cases where non-payment 48 ST/174,345,466/2012 of duty was on a count of fraud, collusion, wilful mis- statement or suppression of fact or contravention of the provisions of the Act and the Rules indulged in with intent to evade payment of duty.
80.Section 11B, as amended in 1991, has been set out in Para 10 hereinabove. Sub-section (1) of Section 11B says that every claim for refund shall be made before the Assistant Commissioner of Central Excise within six months of the relevant date. The application shall have to be in the prescribed form and manner and shall be accompanied by documentary and other evidence including those referred to in Section 12A to establish that the duty claimed by way of refund has not been passed on by him to any other person. The proviso to sub-section (1) expressly states that pending applications for refund made before the commencement of the 1991 (Amendment) Act shall be deemed to have been made under sub-section (1) of Section 11B as amended in 1991 and that the same shall be dealt with in accordance with sub-section (2). Sub- section (2) provides that only in situations specified in Clauses (a) to (f) therein will the refund be granted to the applicant; in all other cases, the amount will be credited to the Fund established under Section 12C. Sub-section (3) declares that notwithstanding anything to the contrary contained in (a) any judgment, decree, order or direction of the Appellate Tribunal or any Court or (b) any other provision of this Act or the rules made thereunder or (c) any other law for the time being in force, no refund shall be made except as provided in sub-section (2). Sub- section (1) of Section 11D too opens with a non obstante clause. It provides for making over of excise duty, realised by a person from his buyer, to the Central Government forthwith. Sub-section (2) says that duty so paid shall be adjusted against the duty payable by him on finalisation of assessment. The sub-section further says that if on such adjustment, any surplus duty is left, it shall be dealt with 49 ST/174,345,466/2012 in accordance with Section 11B. Section 12A requires every person liable to pay duty to indicate prominently in sales invoices, documents of assessment and other similar documents, the amount of duty forming part of the price at which the goods are sold. Section 12B creates a rebuttable presumption of law that every person paying the duty shall be deemed to have passed on the full incidence of duty to the buyer of such goods. Section 12C provides for the establishment of the Consumer Welfare Fund (Fund) while Section 12D provides for rules being made to specify the manner in which the monies in the Fund shall be utilised. Rules have indeed been made under Section 12D, which provide for grants being made to Consumer's Welfare Organisations for being spent on welfare of consumers.
91.It is next contended that in a competitive atmosphere or for other commercial reasons, it may happen that the manufacturer is obliged to sell his goods at less than its proper price. The suggestion is that the manufacturer may have to forego not only his profit but also part of excise duty and that in such a case levy and collection of full excise duty would cease to be a duty of excise; it will become a tax on income or on business. We are unable to appreciate this argument. Ordinarily, no manufacturer will sell his products at less than the cost-price plus duty. He cannot survive in business if he does so. Only in case of distress sales, such a thing is understandable but distress sales are not a normal feature and cannot, therefore, constitute a basis for judging the validity or reasonableness of a provision. Similarly, no one will ordinarily pass on less excise duty than what is exigible and payable. A manufacturer may dip into his profits but would not further dip into the excise duty component. He will do so only in the case of a distress sale again. Just because duty is not separately shown in the invoice price, it does not follow that the manufacturer is not passing on the duty. Nor does it follow therefrom that the 50 ST/174,345,466/2012 manufacturer is absorbing the duty himself. The manner of preparing the invoice is not conclusive. While we cannot visualise all situations, the fact remains that, generally speaking, every manufacturer will sell his goods at something above the cost-price plus duty. There may be a loss-making concern but the loss occurs not because of the levy of the excise duty - which is uniformly levied on all manufacturers of similar goods - but for other reasons. No manufacturer can say with any reasonableness that he cannot survive in business unless he collects the duty from both ends. The requirements complained of (prescribed by Section 11B) is thus beyond reproach - and so are Sections 12A and 12B. All that Section 12A requires is that every person who is liable to pay duty of excise on any goods, shall, at the time of clearance of the goods, prominently indicate in all the relevant documents the amount of such duty which will form part of the price at which the goods are to be sold, while Section 12B raises a presumption of law that until the contrary is proved, every person who has paid the duty of excise on any goods shall be deemed to have passed on the full incidence of such duty to the buyer of such goods. Since the presumption created by Section 12B is a rebuttable presumption of law
- and not a conclusive presumption - there is no basis for impugning its validity on the ground of procedural unreasonableness or otherwise. This presumption is consistent with the general pattern of commercial life. It indeed gives effect to the very essence of an indirect tax like the excise duty/customs duty. In this connection, it is repeatedly pointed out by the learned Counsel for the petitioners-appellants that the levy of duty is upon the manufacturer/assessee and that he cannot disclaim his liability on the ground that he has not passed on the duty. This is undoubtedly true but this again does not affect the validity of Section 12A or 12B. A manufacturer who has not passed on the duty can always prove that fact and if it 51 ST/174,345,466/2012 is found that duty was not leviable on the transaction, he will get back the duty paid. Ordinarily speaking, no manufacturer would take the risk of not passing on the burden of duty. It would not be an exaggeration to say that whenever a manufacturer entertains a doubt, he would pass on the duty rather than not passing it on. It must be remembered that manufacturer as a class are knowledgeable persons and more often than not have the benefit of legal advice. And until about 1992, at any rate, Indian market was by and large a sellers' market."
8.6 In view of the decision of the Apex Court in case of Mafatlal Industries we do not find any illegality in the order of Commissioner (Appeal).
8.7 Further in their grounds of appeal, appellants have put forth an interesting concept of protective appeal. We are unable to comprehend the said concept, because such protective appeals are not envisaged in law. The appeal could have been filed by the person aggrieved by the order passed by the lower authority. He can be aggrieved or not aggrieved. In our view such a concept for filing the protective appeal needs to be rejected.
8.8 Section 35C(1) of the Central Excise Act, 1944 is reproduced below:
"SECTION 35C. -- (1) The Appellate Tribunal may, after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying or annulling the decision or order appealed against or may refer the case back to the authority which passed such decision or order with such directions as the Appellate Tribunal may think fit, for a fresh adjudication or decision, as the case may be, after taking additional evidence, if necessary."
From the reading of the said section it is evident that tribunal cannot decide the appeal holding the same to be infructuous. In case the same is held infructuous, it would 52 ST/174,345,466/2012 imply that the impugned order is upheld. Thus even by accepting the submissions made by the appellants if the impugned order of Commissioner (Appeal) is upheld, then again it would be upholding the rejection of the refund claim on the grounds of unjust enrichment. That being so the subsequent order of Commissioner (Appeal) of 2016 cannot survive.
8.9 In view of discussions as above we do not find any merits in this appeal filed by the appellant.
9.1 In view of discussions as above:-
a. We partially allow the appeal No ST/174/2012 to the extent of setting aside the demands of Service tax, interest and penalties imposed in respect of services namely Tour Operator (Point to Point) & Advertisement Services. We uphold the impugned order in respect of services in category of Tour Operator (Chartered Bus Services). Cross Objection ST/CO/71/2012 are disposed accordingly.
b. Appeal No ST/345/2012 is allowed. c. Appeal No ST/466/2012 is dismissed. Cross
Objections ST/CO/112/2012 are disposed accordingly.
(Order pronounced in the open court on 07.05.2019) (S.K. Mohanty) Member (Judicial) (Sanjiv Srivastava) Member (Technical) tvu