Custom, Excise & Service Tax Tribunal
Hans Travels vs Principal Commissioner, Central ... on 16 August, 2023
Author: Dilip Gupta
Bench: Dilip Gupta
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH-COURT NO. I
SERVICE TAX APPEAL NO. 53128 of 2016
[Arising out of Order-in-Original No. 34/PR.Commr/ST/IND/2016 dated
25.07.2016 passed by the Principal Commissioner, Central Excise, Customs &
Service Tax, Indore (MP) ]
HANS TRAVELS, APPELLANT
15/3, South Tukoganj,
Indore (M.P)
VS.
COMMISSIONER OF CENTRAL EXCISE &
SERVICE TAX, INDORE (M.P.). RESPONDENT
APPEARANCE:
Shri Ankur Upadhyay, Advocate for the Appellant
Shri Harshvardhan, Authorized Representative of the Department
CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT
HON'BLE MS. HEMAMBIKA R PRIYA, MEMBER (TECHNICAL)
DATE OF HEARING : July 04, 2023
DATE OF DECISION : August 16, 2023
FINAL ORDER No. 51058/2023
PER HEMAMBIKA R PRIYA
1. The appeal has been filed by M/s. Hans Travels (hereinafter
referred to as the Appellant) to assail the Order-in-Original dated
25.07.2016 passed by the Principal Commissioner, Service Tax,
Indore wherein the demand of Rs. 69,61,910/- along with
interest and penalty has been confirmed.
2. The Appellant is engaged in providing daily passenger
transport service from one state to another i.e. Interstate or
Intrastate Passenger Transport service. Acting on intelligence
that the appellant was providing taxable service viz., tour
2 ST/53128/2016
operator, the premises of the appellant was searched.
Investigations were initiated and statements of the proprietor,
and other company officials was recorded. On conclusion of the
investigations, show cause dated 18.12.2008 was issued wherein
service tax demand of Rs.98,424/- in respect of booking
commission, Rs.1,11,82,698/- for Tour Operator and
Rs.9,18,286/- in respect of luggage booking was proposed. The
demand for Tour operator was raised on the ground that even
though the appellant was transporting passengers, but as the
buses were in possession of Tourist Permit, hence the appellant is
liable for service tax under the category of "Tour Operator". The
demands were confirmed by the Commissioner vide Order-in-
Original No. 16/COMMR/ST/ IND/2009 dated 06.05.2009 along
with penalties.
3. The Appellant filed an appeal before the Tribunal which vide
Final Order No. ST/A/52281/2015-CU[DB] dated 30.04.2015
dropped the demand of Rs. 9,18,286/- under Business Support
Service but confirmed the demand of Rs. 98,424/- on
commission on booking. In respect of demand under the
category of Tour Operator service, the Tribunal remanded the
matter back to the Adjudicating Authority to examine the
eligibility of the appellant for the benefit of exemption under
Notification No. 20/2009-ST dated 07.07.2009 under which the
person rendering passenger service even though through buses
having "Contract Carriage" would be exempted from service tax.
Also, the Tribunal directed the Adjudicating Authority to ascertain
3 ST/53128/2016
the invokability of the extended period and the provisions of
section 78 of the Finance Act, 1994.
4. In the denovo adjudication, the Commissioner vide the
impugned order confirmed the demand of service tax under the
category of Tour Operator Service on income appearing under
that head, holding that the services were rendered towards
tourism/conducted tour, charter or hire service for buses holding
tourist vehicle permit which had been issued by the Secretary,
State Transport, M.P. The Commissioner confirmed demand on
the receipts of sale of tickets from outstation offices of Appellant
appearing under the head "Ticket Booking Other Stations" and on
receipts from sale of tickets from Head office of appellant under
the heading "Head office cash booking" for the year 2006-07. In
respect of Financial Year, 2007-08, he confirmed the demands
on receipts appearing under the heading "Head office Cash".
5. The learned Counsel for the Appellant stated at the outset
that without going into the merits of the demand, the reasoning
given by the Commissioner for confirming demand is erroneous
and illegal and the impugned order is beyond scope of show cause
notice. He stated that the allegation in show cause notice was
that since the bus permit issued to the Appellant are of Contract
Carriage/ Tourist, hence the Appellant is liable to service tax,
whereas the Commissioner confirmed the demand on a
completely different ground. He further added that if there had
been such contention/ allegation in show cause notice, only then
the Appellant would have produced the supporting documents to
4 ST/53128/2016
corroborate his contention that the receipts are from passenger
transportation only. The impugned order passed by the
Commissioner was thus arbitrary and illegal. He relied on the
following decisions to support his contention:
(i) Commissioner of C.EX., Nagpur Vs Ballarpur Industries
Ltd.1
(ii) Commissioner Vs Reliance Ports and Terminals Ltd.2
6. He submitted that nowhere has it been noted in the
impugned order as to, the basis or scrutiny of the accounts/
ledgers of the Appellant whereby the Adjudicating Authority had
reached the conclusion that all the receipts of outstation office
and Head office of the Appellant is from operation of Tours. The
department had not adduced a single evidence in support of his
conclusion. The Adjudicating Authority had reached this
conclusion only as the single basis that the amounts indicated
under these heads were large.
7. The Appellant in this context, had submitted a Chartered
Accountant's Certificate and certified copies of the ledger of all
the ticket bookings done by the Appellant from their Outstation
offices and Head offices, which clearly indicate that the said
amount in the ledgers pertain to individual ticket booking. A
sample copy of daily voucher and tickets also indicates the daily
receipt amount from sale of tickets appearing in the ledger. A
perusal of the said ledgers and vouchers makes it amply clear
1 [2007 (215) E.L.T. 489 (S.C)]
2 [2016 (334) E.LT. 630 (Guj.)]
5 ST/53128/2016
that the receipts are on account of sale of tickets for daily
passenger inter state transportation of passenger and not from
any "Tour Operator Services".
8. The learned Counsel also submitted that the said
notification had been subsequently amended vide notification No.
20/2009 dated 07.07.2009 wherein exemption was extended to
tour operator services having contract carriage permit for inter
state or intra state transportation of passenger but excluding
tourism, conducted tours, charter or hire services. He also
submitted that the show cause notice was time barred as there
was no suppression of facts from the department.
9. The learned Authorised Representative appearing for the
department submitted that one of the basic contentions by the
appellant in the grounds given in the appeal memorandum is that
the impugned Order is beyond the scope of show cause notice. He
submitted that the Tribunal vide its earlier order dated
30.04.2015 had categorically upheld the allegation of the
department in the show cause notice that impugned service
rendered by the appellant using a contract carriage would fall
under the category of tour operator service. To that extent, the
show cause notice had gotten merged with the said order of the
Tribunal. Therefore, the argument that the impugned order has
become infructuous as it has traversed beyond the scope of show
cause notice, is not legally tenable and liable to be rejected.
10. He added that the onus of proof is on the appellant to prove
its case that they are is covered by the exemption notification. He
6 ST/53128/2016
drew attention to paragraph 21.11 of the impugned order
wherein the Adjudicating Authority had categorically held that as
the appellant had not submitted any documents and in view of the
material on record, the appellant is not eligible for the benefit of
the said notification. The appellant in the appeal memorandum
has also not submitted any document/evidence to prove that big
amounts shown in their ledgers towards booking are towards
passenger booking and not towards tourism, conducted tours,
charter or hire service. Therefore, the onus is on the appellant
to disprove the presumption / findings given by the Adjudicating
Authority and to establish that they are covered by the said
exemption notification. He relied on the following judgments/
orders:
a. Novopan India Ltd.3
b. Inox Wind Ltd.4
11. We have heard the learned counsel for the appellant and
the learned authorised representative appearing for the
Department. The impugned order and the present appeal has to
be examined as per the directions of this Tribunal in its remand
order No. 52281/2015 dated 30.4.2015. The relevant portion of
the remand order is reproduced for ease of reference:
"6. In the light of the foregoing, we pass the following order: -
(i) the demand of ₹ 98,424/- is upheld as uncontested
(ii) demand of ₹ 9,18,286/- under business support service is set-
aside
3 [MANU/SC/1216/1994]
4 [2020 (35) G.S.T.L. 123 (Tri. - All.)]
7 ST/53128/2016
(iii) as regards the demand under tour operator service, the case is
remanded to the adjudicating authority for de novo adjudication on the
limited aspect of eligibility of the appellant for the benefit of exemption
under notification No. 20/2009 - ST, dated 07.07.2009 has made
applicable with effect from 01.04.2000, invokability of the extended
period and imposability of mandatory penalty under section 78 ibid. We
make it clear that the adjudicating authority shall determine the
eligibility of the appellant for the benefit of the said notification keeping
in view the fact that the vehicles involved were tourist vehicles and not
stage carriages.
(iv) The demand and penalties will be recomputed based on the
adjudicating authority is finding regarding eligibility(or otherwise) of the
appellant for the benefit of the notification No. 20/2009-ST, dated
07.07.2009, and invoke ability of the extended period and the
provisions of section 78 ibid."
12. In this regard, it would be appropriate to reproduce the
findings of the Commissioner on this aspect;
"21.6 The Hon'ble CESTAT New Delhi vide its Final Order No.
ST/A/5228/2015-CU[DB] dated 30.4.15 directed that "As regards
the demand under Tour operator Service, the case is remanded
to the adjudicating authority for de novo adjudication on the
limited aspect of eligibility of the appellant for the benefit of
exemption under Not. No. 20/2009-ST, dated 07.07.2009 as
made applicable with effect from 01.04.2000 invokability of the
extended period and imposability of mandatory penalty under
Section 78ibid. We make it clear that the adjudicating authority
shall determine the eligibility of the appellant for the benefit of
the said Notification keeping in view the fact that the vehicles
involved were tourist vehicles and not stage carriages. The
demand and penalties will be recomputed based on the
adjudicating authority's finding regarding eligibility (or otherwise)
of the appellant for the benefit of Not. No. 20/2009-ST and
invokability of the extended period and the provisions of Section
78ibid."
21.7 I have gone through the submission made by the notice at
the time of personal hearing on 20.10.2015 and further
8 ST/53128/2016
submission dated 9.6.16. with reference to letter
C.No.ST/46/ADJ-1/2008/3098-99 dated 19.5.16 followed by
reminder letter even no 3426-25 dated 24.5.16 requesting
Noticee to submit the segregated details of all the amount
received by them separately for the passenger ticket booking,
tourism, conducted tour, charter or hire service provided by them
for the period covered under the referred show cause notice. The
Noticee has not provided the ledgers of all the heads especially
for bus ticket booking and bus plying. In the absence of this the
entitlement could not be ascertained under Not. No. 20/2009-ST
dated 7.7.2009. The Noticee was further requested vide letter
dated 29.06.2016 to submit the details/ledger of the amount
received by them on account of Ticket booking and Bus plying for
the period covered under the Show Cause Notice. The Noticee
submitted the detailed ledgers of all the years covered in the
Show Cause Notice on 04.07.2016.
21.8 The Noticee further submitted that the allegation
regarding arranging/providing their busses for the marriage
parties/picnic is very presumptuous and hypothetical allegation.
The present demand is purely based on figures appearing in the
profit and loss account and balance sheet for the respective
years. There is no cogent substantive evidence that the Noticee
have provided their bus services for marriage or picnic. Hence
this allegation is fictious and not tenable. Even if it is considered
that the amount of bus rent contract booking pertains to the
booking of buses for picnic/marriage etc in that case also the
same cannot be taxed as the Noticee has not organized any tour
and even this amount is considered as taxable than too it can be
seen that in some of the years, it is below the exemption limit of
Rs 10 lacs and hence eligible for exemption. I do not find merit in
the above submission made by the Noticee. I observe on the
basis of documents available on record that the journey carried
out by the Noticee from one town to another town as evident
from the printed leaflet is a point to point transport and is a
"TOUR" as defined under section 65(113) of the Finance Act
1994. It is also evident that the Noticee was engaged in
planning, scheduling, organizing or arranging tour in buses
9 ST/53128/2016
holding tourist vehicle permit granted under Motor Vehicle Act
1988. Copies of permit of 25 buses submitted by the Noticee
being plied by them reveals that the permit are tourist permit. I
also observe that the Noticee are engaged in the business of
planning, scheduling, organizing, arranging and also operating
tour as evident from some of the list of passenger, tour program,
tour route duly approved by the State Transport Authority, M.P.
Gwalior. On perusal of above 25 tourist permit issued by the
Secretary, State Transport Authority, Madhya Pradesh, Gwalior. I
observe that the permit contains the details of tourist passenger
places where the tourist passenger will travel and the tour
program would be conducted as per the dates mentioned in the
permit. On perusal of copies of various contract available on
record I find that the Noticee is engaged in providing services of
tour operator by way of providing their buses for marriage
parties, picnic parties.
21.9 I also find that the Noticee have not disputed that the
vehicles operated by them were tourist vehicle and holding
tourist permit. As per records available the vehicles under
reference were also having special contract carriage permit to
operate tour for a set of passengers as per list on route approved
by the State Transport Authority. In view of documents available
on record I hold that the activity of the Noticee is an activity
liable to Service Tax under tour operator Services and not against
stage carriers as claimed by the Noticee.
21.10 The Noticee for the services provided in capacity of Tour
operator has accounted receipt of this under different heads
namely:-
Ticket Booking.
Bus rent contract booking, and
Receipt from bus plying.
The Noticee vide his letter dated 9.9.16 has submitted the ledger
account of Bus party booking only. The Noticee have not
submitted any documentary evidence which shows that they have
exclusively received Rs.21,68,97,955/- towards TICKET
BOOKING. The Noticee was again asked to submit the ledgers of
10 ST/53128/2016
Ticket booking and Bus plying vide letter dated 29.06.2016. The
Noticee submitted the detailed ledgers of ticket booking and bus
plying on 04.07.2016.
21.11 On verification of the ledgers it appeared that the
Noticee has prepared various ledgers for ticket booking and bus
plying. I find that the Noticee has submitted ledgers with the
heading "Ticket Booking Other Station" for Rs.4,42,81,019/- and
another for "Head Office cash booking" for Rs.3,95,59,176/- total
amounting to Rs. 8,38,40,195/- for the year 2006-07. Similarly
for the year 2007-08 they submitted a ledger with the heading
"Head Office cash booking" for Rs. 5,18,35,892/-. I find that the
amount shown in these ledgers pertains to picnic/ marriage,
tourism, conducted tour, charter or hire service etc. as the
amounts shown are very big and cannot be for individual
passenger bookings and there is no supporting document that the
amount pertains to passenger booking. I find that this amount is
not eligible for exemption under Notification No 20/2009-Service
Tax dated 7.7.2009 as these bookings are as against buses
holding tourist vehicle permit granted under motor vehicle Act
1988 issued the Secretary, State Transport Authority, Madhya
Pradesh, Gwalior for tourism, conducted tour, charter or hire
service as such they are not eligible for exemption granted under
Finance Act, 2011-2012 under Tour Operator service to tour
operators with contract carriage permit. In fact this amount
pertains to amount received towards service provided in capacity
of TOUR OPERATOR against buses having tourist permit and
there is no evidence available on record which shows that this
amount was received towards individual bookings. In the light of
Notification No 20/2009-Service Tax dated 7.7.2009 and CESTAT
order dated 24/7/2015 there are no documents as per record and
also the Noticee has not submitted any documents which shows
that the Noticee is entitle for exemption in terms of Notification
No. 20/2009-Service Tax dated 7.7.2009. I also observe that on
perusal of tourist permit available on record along with list of
passengers enclosed for the purpose of excursion tour to be
submitted to the State Transport Authority, and conclude that the
Noticee is engaged in providing services in the capacity of TOUR
11 ST/53128/2016
OPERATOR and no service has been provided by the Noticee in
capacity of stage carrier and I hold accordingly. I also find that
the Noticee is not entitle for exemption of Rs 10 lacs as claimed
by them. The remaining amount found eligible for exemption
granted under Notification No. 20/2009-ST dated 7.7.2009 and
Section 72 Finance Act, under Tour Operator service to tour
operators for transport of passengers."
13. From the above paragraphs, it is abundantly clear that
owing to the retrospective amendment of the notification, the
Commissioner had to specifically examine the issue afresh by
asking the appellant to establish their eligibility to the benefit of
the notification no. 20/2009-Service Tax dated 7th July, 2009
only. The issue as to whether the service provided by the
appellant is classifiable under Tour Operator service is not open
for decision, in the remand order. Hence, we restrict ourselves to
this aspect only. For ease of reference, the Notification is
reproduced hereinafter:
"Notification No.20/2009 - Service Tax
New Delhi, the 7th July, 2009
G.S.R. (E).- 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 permit 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.
[F.No.334/13/2009-TRU]
(Prashant Kumar)
Under Secretary to the Government of India"
12 ST/53128/2016
14. Subsequently, as highlighted by the learned Counsel, a
corrigendum 334/8/2009 dated 31.08.2009 was issued to the
aforesaid Notification no. 20/2009 -ST dated 07.07.2009 which
read as follows:
"Tour Operator Service-Exemption to contract carriage permit holders-
Corrigendum to Notification No. 20/2009-ST dated 07.07.2009
In the notification of the Government of India in the Ministry of Finance
(Department of Revenue), No. 20/2009-Service Tax, dated the 7th July,
2009 published in the Gazette of India, Extraordinary, Part II, Section 3,
Sub-section (i) vide G.S.R. 492(E), dated the 7th July, 2009, at Page 89,
in line 18,
For "contract carriage permit", read "contract carriage or tourist vehicles
with a permit".
15. With the issue of this corrigendum, we observe that
exemption was available to the service of tour operator for inter-
state or intrastate transportation of passengers, other than for the
purpose of tourism, even for vehicles plying with tourist permit.
16. However, we note that the adjudicating authority in para
21.11 of the impugned order has categorically held that the
appellant did not submit any documents in support of his
contention. No cogent explanation was provided or evidence to
prove that the large amounts shown in the ledgers towards
booking are towards passenger booking and not tourism,
conducted tours, charter or hire service. In this regard, we note
that no cogent explanation was provided by the appellant to
clarify the block booking of tickets for officials of Laxmivilas Bank
Ltd during the period under consideration. Similarly, there are
other block booking of tickets to Indore to Surat, Aurangabad,
13 ST/53128/2016
Nasik, Pune etc. The appellant has not been able to establish that
these bookings involved only interstate or intrastate
transportation of passengers, and it did not include tourism.
17. We note that the Commissioner has observed that the 25
tourist permits issued by the Secretary, State Transport Authority
contain the details of tourist passenger places where passengers
will travel and the tour programme would be conducted as per the
dates mentioned in the permit. He has also examined the copies
of contracts which were available on record wherein it is
established that the appellant was providing the services of tour
operator by providing their buses for marriage, parties, picnic
parties etc. From the records available, the Commissioner has
held that there are no documents available in the record and nor
had the appellant submitted any documents which shows that
they are eligible for the exemption in terms of the notification. We
find that the Supreme Court in the case of Novopan India Ltd.,
Hyderabad Vs. Collector of Central Excise and Customs,
Hyderabad5 [relied on the decision in the case of Mangalore
Chemicals and Fertilisers Ltd v. Deputy Commissioner of
Commercial Taxes and Others6 had opined as follows:
"14. In Mangalore Chemicals & Fertilizers Ltd. v. Deputy Commissioner
of Commercial Taxes & Ors. [1991 (55) E.L.T. 437 (SC) = 1992 Suppl.
(1) S.C.C. 21], a Bench of this Court comprising M.N. Venkatachaliah, J.
(as the learned Chief Justice then was) and S.C. Agarwal, J. stated the relevant principle in the following words :
"Shri Narasimhamurthy again relied on certain observations in CCE v. Parle Exports (P) Ltd. [1988 (38) E.L.T. 741 (SC) = 1989 (1) SCC 5 [MANU /SC/1216/1994] 6 [1992 Suppl.1 SCC 21] 14 ST/53128/2016
345), in support of strict construction of a provision concerning exemptions. There is support of judicial opinion to the view that exemptions from taxation have a tendency to increase the burden on the other unexempted class of tax payers and should be construed against the subject in case of ambiguity. It is an equally well known principle that a person who claims an exemption has to establish his case. Indeed, in the very case of Parle Exports (P) Ltd.
relied upon by Shri Narasimhamurthy, it was observed :
"While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoided."
The choice between a strict and a liberal construction arises only in case of doubt in regard to the intention of the legislature manifest on the statutory language. Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute. If the words are plain and clear and directly convey the meaning, there is no need for any interpretation. It appears to us the true rule of construction of a provision as to exemption is the one stated by this Court in Union of India v. Wood Paper Ltd. [1990 (47) E.L.T. 500 (SC) = 1990 (4) SCC 256] :
"...Truly speaking liberal and strict construction of an exemption prevision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play should be given to it and it calls for a wider and liberal construction....''''
15. This was also the view expressed in The Commissioners of Inland Revenue v. James Forrest [(1890) 15 A.C. 334] where Lord Halsbury, L.C. observed : "all exemptions from taxation to some extent increase the burden on other members of the community ....'' and in Littman v. Barron (Inspector of Taxes) (1951 (2) A.E.R. 393), a decision of the Court of Appeal where Cohen, L.J. said : "the principle that in case of ambiguity a taxing statute should be construed in favour of a taxpayer does not apply to a provision giving a taxpayer relief in certain cases from a section clearly imposing liability"."
18. We hold that the appellant has not been able to discharge the onus on him prove his case that they are eligible for 15 ST/53128/2016 exemption under the said notification. Despite clear directions of this Tribunal to the adjudicating authority to determine the eligibility of the appellant for the benefit of the said notification, keeping in view the fact that the vehicles involved were tourist vehicles and not stage carriages, he has failed to produce the relevant documents to support his contention that he did not fall within the exclusion condition of the Notification.
19. We now come to the limitation aspect. We find that the appellant has pleaded there was confusion in regard to the definition of Tour Operator. We note that definition of 'Tour Operator' during 01.04.2000 to 09.09.2004 under Section 65 (52) was as follows:
"'Tour Operator' means any person engaged in the business of operating tour in a tourist vehicle covered by a permit granted under the Motor Vehicle Act, 1988 (59 of 1988) or the Rules made there under -"
Thereafter, the definition of 'Tour Operator' with effect from 10.09.2004 under Section 65 (115) read as follows:
"'tour operator' 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 covered by a permit granted under the Motor Vehicle Act, 1988 (59 of 1988) or the rules made thereunder -"
Further, with effect from 16.05.2008 the definition of Tour Operator', under Section 65 (115) read as follows:
"'Tour operator' means any person engaged in the business of operating tours in tourist vehicle or a 'contract carriage' by whatever name called covered in a permit, granted under the Motor Vehicle Act, 1988 (59 of 1988) or the rules made thereunder-"
16 ST/53128/2016
20. It is therefore, apparent that definition of tour operator has been amended from time to time since it was brought into the service tax net. Therefore, it has to be acknowledged that there may have been confusion to the scope of this service, and the benefit should go the taxpayer. We uphold the demand for the normal time period, and set aside the demand for the extended period. The penalty is also modified accordingly.
21. In view of the above, we modify the impugned order to the extent indicated above, and allow the appeal partially.
(Pronounced in the open court on 16.08.2023 ) (JUSTICE DILIP GUPTA) PRESIDENT (HEMAMBIKA R PRIYA ) MEMBER (TECHNICAL) ss