Custom, Excise & Service Tax Tribunal
Cox And Kings Ltd vs Service Tax - Chennai on 20 June, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT CHENNAI
ST/119/2011
(Arising out of Order-in-Appeal No. 159/2010 (MST) dated
27.08.2010 passed by the Commissioner of Central Excise
(Appeals), Chennai).
M/s. Cox and Kings Ltd. : Appellant
Vs.
CCE & ST, Chennai : Respondent
Appearance Shri Archit Agarwal, Consultant, for the appellant Shri R. Subramaniyam, AC (AR) for the Respondent.
CORAM:
Hon'ble Shri Madhu Mohan Damodhar, Member (Technical) Hon'ble Shri P. Dinesha, Member (Judicial) Date of Hearing/Decision: 20.06.2018 FINAL ORDER No. 41964 /2018 Per: Madhu Mohan Damodhar The dispute in this appeal concerns the liability of service tax under the category of BAS on the amounts received from Amadeus India Pvt. Ltd., as commission for using the Amadeus Software Systems for International Air ticket booking. The period in dispute is 2003-04 to 2004-05. A SCN dated 15.05.2008 was 2 issued proposing demand of Rs. 37,260/- on this account which was confirmed by the original adjudicating authority in order dated 24.05.2008, who also imposed equal penalty in terms of Section 78 of the Finance Act, 1994. In appeal, the lower appellate authority vide the impugned order dated 27.08.2010 upheld the order of the original authority and rejected the appeal and hence the appellant is before this forum.
2. Today when the matter came up for hearing, Ld. Consultant Shri Archit Agarwal fairly submits that the issue per se has been decided by the Tribunal against them. He however draws our attention to the judgment of the Hon'ble High Court of Madras in Airlines Agents Association Vs. UOI- 2006 (3) STR 3 (MAD) and takes us to p-14 of the judgment to point out the observation of the Court that unless the air travel agents provide a service to the customers, there would be no question of their getting a commission from the airlines; it is only on the basis of the service ie., provided which is made taxable. The Ld. Consultant submits that based on these observations, the Hon'ble High Court of Madras upheld the levy of service tax on the Air Travel Agents service (ATAS). He argues that the same analogy should be applied in respect of the present appeal; that the services are provided by the appellant only to a customer and hence the commission received from Amadeus will also have to be brought only air travel service under Air Travel Agents Service (ATAS) and not under BAS; once the service is brought under ATAS, 3 appellants are entitled to the exemption under the Notification No.22/97-ST dated 26.06.1997. He also submits that even on limitation the impugned order cannot sustain since the SCN for the period 2003-04 to 2004-05 was issued only on 15.05.2008. He draws our attention to the ratio of the Tribunal in M/s. Janata Travels Pvt. Ltd. 2017-TIOL-2943-CESTAT-Delhi where the issue was decided against the appellants on merits. However, the appeal was allowed on limitation.
3. On the other hand, the Ld. AR supports the impugned order. He also draws our attention to the earlier decision of the Tribunal in Final Order No.40506 -40509/2018 dated 27.02.2018, in the cases of New Royal Link Travels & Ors. Vs. CST, Chennai, wherein tax liability on identical services have been confirmed.
4. Heard both sides and have gone through the facts. 5.1 We find that the issue on taxability on the commission received from Amadeus had already been decided in a number of Tribunal decisions holding that the amount received would be exigible to service tax under BAS. The Ld. Consultant was at pains to draw our attention to point out that the judgment of the Madras High Court in Airlines Agents Association (supra) would very much apply in respect of Amadeus also. We do not find any merit in this proposition. The Hon'ble High court of Madras in the said judgment, based on a writ petition, had only gone in to the vires of the provisions contained in Section 65(3) and 67(k) of the 4 Act as amended and Rule 2 d (viii) of Service Tax Rules as amended. The Hon'ble High Court in that judgment had held that the commission received from the customers for booking of air tickets would come under the ambit of Air Travel Agent service only. Be it as it may be, the facts in the present matter are definitely not pari materia.
5.2 In the present case, there is a definite requirement of the appellant to use Amadeus as the only Computer Reservation Systems (CRS) of choice for all the reservations from their main office and associated offices in India. As per the agreement seen at page -98 of the appeal paper book, the appellants have received definite pre-determined service fee/commission depending on the monthly segment contract above by them. This being so, it cannot be then argued that they are not promoting the business of Amadeus to the exclusion of the other Computer Reservation Systems (CRS). Viewed in this light, these activities will surely then fall within the scope of BAS as defined in Section 65 (19) (2) of the Finance Act, 1994, in particular, promotion or marketing of services of the client.
5.3 We therefore do not find any merit in the submission of the Ld. Consultant on the contention that the said commission amount cannot be put to tax under BAS. The appeal on this score therefore does not find favour with us and therefore rejected. 5 5.4 The Ld. Consultant has also made a plea on limitation. We note that the matter came to light only pursuant to an audit conducted in February, 2007. Hence we do not find any merit in this plea per se can be set aside on limitation. However, considering that the issue was and still is mired in litigation, we find sufficient cause for setting aside the penalty imposed under Section 78 ibid. So ordered.
6. In the result, the impugned order is modified only to the extent of setting aside the penalty without disturbing the demand of service tax or the interest thereon.
7. Appeal is partly allowed in above terms.
(Order dictated and pronounced in the open Court) (P. DINESHA) (MADHU MOHAN DAMODHAR) MEMBER (JUDICIAL) MEMBER (TECHNICAL) BB