Custom, Excise & Service Tax Tribunal
Ms Tsi Yatra Pvt Ltd vs Principal Commissioner Central Excise ... on 20 December, 2024
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHANDIGARH
~~~~~
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No.60903 Of 2017
[Arising out of Order-in-OriginalNo.DZU/Adj//TSIYPL/70/2015 dated 03.08.2017
passed by the Additional Director General (Adjudication), New Delhi]
M/s TSI Yatra Pvt. Ltd. : Appellant
Plot No.272, 7th Floor, Gulf Adiba,
Phase II, Udyog Vihar, Gurugram,
Haryana, 122008
VERSUS
The Commissioner of Central Excise,
Goods and Service Tax, Gurugram : Respondent
Plot No.36-37, Sector-32, Gurugram-122001
APPEARANCE:
Shri Arjun Raghavendra, Advocate for the Appellant
Shri Siddharth Jaiswal, Shri Pawan Kumar, Shri Shivam Syal
and Shri Gaurav Gupta, (I.O), Authorised Representatives
for the Respondent
CORAM: HON'BLE Mr. S. S. GARG, MEMBER (JUDICIAL)
HON'BLE Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL)
FINALORDER No.60689/2024
DATE OF HEARING: 21.08.2024
DATE OF DECISION: 20.12.2024
P. ANJANI KUMAR:
The appellants, M/s TSI Yatra Pvt. Ltd. assail the impugned
order No. DZU/Adj./TSIYPL/70/2015 dated 03.08.2017, passed by Ld.
Additional Director General (Adjudication), Directorate General of GST
Intelligence (DGGI), vide which a demand of Service tax of INR
23,16,33,959, has been confirmed against the Appellant, for the
period April 2010 to March 2014, under Section 73A (4) of the Finance
2 ST/60903/2017
Act, 1994 along with interest.
2. Brief facts of the case care that the appellants are a company
established under the provisions of Companies Act, 2013; they are
engaged, inter alia, in the business of booking of air tickets for
various domestic and international airlines through their branch
offices; branch offices and the head office of the Appellant were
separately registered with the jurisdictional service tax
Commissionerates; appellant obtained centralized registration number
at its head office with effect from April 1, 2013. On the basis of
information received and investigations conducted, the officers of
DGGI entertained an opinion that the Appellants had illegally collected
an amount representing as service tax where it was not required to be
collected from the sub-agent/customer of the airline under section
73A of the Finance Act, 1994; accordingly various Show Cause Notices
were issued to the different branches of the appellants; vide a
common impugned order as above, the proposals were confirmed.
3. Shri Arjun Raghavendra, Learned Counsel for the appellants
explains the transactions involved in the provision of the Air Travel
Agents Services by the appellants and submits that the nature of
transaction is misunderstood both in the impugned SCN and OIO. He
submits that theoretically, for accounting purposes, there are three
transactions as below.
(i). Transaction 1: This transaction is between the airline (service
provider) and the customer (service recipient) for the Air travel
service provided by the airlines; the consideration is the ticket
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priceplus Service Tax, if any, paid by airline and the sub-agent/Agents
are only facilitating this transaction (pass through mechanism).
(ii). Transaction 2: this transaction is between airlines (service
recipient) and the agent and sub-agent (collectively acting as service
providers) for the services provided in relation to the booking;
consideration is the commission, inclusive of Service Tax and is the
gross revenue earned by the agent/sub-agent collectively for the
services provided; the Service Tax is paid to exchequer by Appellant.
(iii). Transaction 3: This transaction is between the agent and sub-
agent; Commission (inclusive of service tax) received is shared
between them; no service provider and service recipient relationship
and it is mere revenue sharing between the agent and sub-agent.
4. Learned Counsel explains the actual money flow and tax discharge,
by giving an example of the invoice, No.AI/ 13-14/B2659006 dated
26.03.2014, relied upon in the OIO, issued by the appellants to sub-
agent M/s Mahabir Travel & Tours; first amount, of Rs. 4782.60 and
616.00, shown in this invoice, was for booking two international air
tickets from Dacca to Kolkata; the amounts are inclusive of service
tax, on the air ticket, discharged by the airline; next amount
mentioned, of Rs. 82.18 (IATA discount of Rs. 33.67 and Performance
Linked Bonus of Rs. 48.51), was the commission that M/s Mahabir
Travel & Tours (as sub-agent) was withholding; this amount is
subtracted in the invoice; on this commission of Rs.82.18, Service Tax
of Rs. 10 (@ 12,36%) stands paid by the appellant on receipt of the
commission from the airline. He submits that theoretically, the sub-
agent was to receive the share of their commission from the agent;
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however, as per the industry practice, the sub-agent, who collects the
money from Customers, withholds the amount that they were entitled
to receive from the airlines. He submits that theoretically the amount
was supposed to flow form the appellants to the subagent; it is to be
noted that the sub-agent pays not only his portion of service Tax but
TDS of Rs. 8.22 to the appellant; the portion of the Service Tax
component sharable by the sub-agent by the agent is shown in the
same invoice to account for the sharing of the tax too. Hence this
amount is added in the invoice. He submits that the Service Tax
shared between the agent and sub-agent gets shown on the invoice;
no extra service tax is collected from sub-agent; there is no amount
representing as service tax that is actually ―collected and retained‖ by
the appellants.
5. Learned Counsel submits that the invoice serves to capture two
sets of transactions as a consolidated account adjustment document;
one, the booking of the air ticket for which the entire booking amount
(inclusive of service tax) is to be transferred from the sub-agent to the
airline via the Appellant; two, the commission that the sub-agent is
entitled for making this booking has to be retained since in effect the
sub-agent has to receive such commission from the airline; the
service tax indicated in this invoice is the service tax liability of the
sub-agent for the services provided to the airline; as part of the
contractual agreement, the liability to pay this ST to the exchequer is
shifted to the Appellant; since the actual legal incidence is on the sub-
agent, the accounting entry is made and adjusted so that the liability
stands covered; mere mechanism of payment to the exchequer is
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shifted to the Appellant; therefore, in practice only the actual
commission (net of service tax) is withheld by the sub-agent and no
service tax is actually collected by the Appellant; hence, the impugned
order is erroneous on the question of facts and merits to be set aside
in its entirety.
6. Learned Counsel takes us through the provisions of Section 73A
and submits that the impugned order while confirming the demand
under section 73A (4) holds that there is violation of section 73A (2)
by the Appellant; any such violation can be alleged only if three
questions i.e. (i). Whether any amount was collected as representing
service tax that was not required to be collected? (ii). Whether such
amount collected was retained? and (iii). If not retained, whether it
was not deposited with the exchequer? can be answered in the
affirmative. In respect of question No.(i), learned counsel submits that
no amount was actually collected as representing service tax from the
sub-agent that was not required to be collected; the amount shown as
service tax in the invoice is to account for the sub-agent's share of
service tax. Learned counsel answers the second question stating that
submits that no such amount was collected and hence there does not
arise any question of retaining the same. As regards the third
question, he submits that whatever is the amount of service tax that
was collected from the airline, it was deposited in the exchequer; the
accounting entry shown in the invoice also corresponds to such
amount that was already paid into the exchequer and not any
additional amount. He submits that the impugned order wrongly
answers question (i) in the affirmative and ignores questions (ii) and
6 ST/60903/2017
(iii). It confirms the demand basis its wrong conclusion in answering
the question (i).
7. Learned Counsel submits also that the adjudicating authority relied
on the fact that two representative invoices, i.e. No. ZXJ8XF dated
17.09.2011 and No. AI/13-14/B2659006 dated 26.03.2014, include a
service tax component, and concluded that the Appellant has
deposited the service tax which they have collected from the airlines
by considering the commission, received from the airlines, as inclusive
of service tax and that the service tax was separately collected by the
Appellant from the customer/sub-agent, and this was not deposited
with the government. He submits that while the first conclusion is true
the second conclusion is factually wrong; SCN issued due to a
misunderstanding of the business model of the Appellant was
confirmed by the Adjudicating Authority, who has also failed to
appreciate the actual nature of the transaction involved.
8. Learned Counsel submits further that it is to be appreciated that
both the Agent and sub-agent collectively provide the service to the
airline and therefore the gross commission received from the airline is
nothing but the revenue earned by them collectively and shared
between them respectively, as mutually agreed upon; once this
revenue is earned, they have the legal obligation to discharge service
tax as service providers; this legal obligation is by virtue of section
68(1) of the Finance Act, 1994 which mandates payment of service
tax by the service provider; however, there is nothing in the Act which
says how the legal obligation to pay service tax shall be carried out if
a service is collectively provided by more than one person, leaving the
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service providers with two options i.e. either one of the service
providers pays the service tax on the entire revenue to the exchequer
and then internally share the revenue (inclusive of the service tax
amount paid) or both the service providers pay service tax separately
to the exchequer in proportion to the revenue that they share.
Learned Counsel submits that in the instant matter, the Appellant
pays the service tax on the entire commission to the exchequer and
then internally the revenue is shared (inclusive of service tax which is
already paid); the impugned order has failed to appreciate this
revenue sharing mechanism, between the agent and the sub-agent, is
inclusive of the service tax already paid to the exchequer; it is purely
for accounting purposes, the agent and the sub-agent issue invoices
to one another in which the service tax component that is part of the
revenue sharing also stands reflected; the service tax component has
been wrongly construed in the impugned order as collection of an
amount representing as service tax. He submits that it is evident from
the explanation above that there is no amount illegally collected as
representing service tax as confirmed in the order from the sub-agent
by the agent in so far as the sharing of commission between the two
of them is concerned; there was no service tax liability as far as the
revenue sharing is concerned and there is no tax collected on such
sharing; therefore, the matter does not call for section 73A of the
Finance Act, 1994 which is relevant only when an amount
representing as service tax is collected where it was not required to be
collected.
8 ST/60903/2017
9. Learned Counsel submits moreover that in the instant matter, it is
only the revenue sharing that is given effect by issuing the invoices;
since the revenue is inclusive of service tax, for accounting clarity it is
shown as ―flight service tax‖ on the invoices; the same has been
wrongly construed by the department as collection of service tax; the
entire service tax liability on the commission received from the airline
stands discharged. There is no double collection of service tax by the
Air Travel Agent; it is just a question of paying service tax on behalf of
the sub-agent; the cash flow between the Appellant and the sub-agent
involves sharing of the consideration post the discharge of service tax;
it does not involve any collection of service tax as alleged in the notice
and upheld in the impugned order.
10. Learned Counsel submits in addition that it should also be noted
that the impugned order or the notice at no point claim that the
service tax liability discharged on the commission received by the
airlines is less than the amount demanded in the order indicating
clearly that the amount that is being demanded is actually part of the
amount that is paid as service tax by the agent; however, the
impugned order has failed to appreciate the nuance of these three
transactions; learned Adjudicating Authority is of the wrong notion
that service tax has been collected illegally by the Appellant from the
sub-agent; there is no collection or non-deposit of service tax; the
service tax has been paid by the Appellant and then the revenue
sharing with the sub-agent has been affected through accounting
adjustment in the invoices by the Appellant in line with the agreement
between the Appellant and the sub-agent.
9 ST/60903/2017
11. Learned Counsel submits that the impugned order fails to
appreciate that though theoretically there are transactions where
consideration flows from agents to airlines (for air ticket) and then
from airline to agents (for commission), in practice the actual flow of
money between the agent and the sub-agent is only in one direction
since only the net value flows to the agent from the sub-agent; the
impugned order fails to appreciate that the actual revenue sharing
between the agent and the sub-agent does not happen by the agent
transferring the share of the commission to the sub-agent; but it
happens by the sub-agent withholding their share of the commission
and passing only net of the value of air ticket price to the agent;
therefore, the invoice between the agent and the sub-agent comprises
both transaction 1 (flow of air ticket price) and transaction 3 (sharing
of revenue between the agent and sub-agent) given the
understanding that transaction 2 has occurred between the airline and
the agent.
12. Learned Counsel submits that in the instant case, the Appellant
has discharged the ST liability on the commission received before
sharing the commission with the sub-agents; this position of one
service provider paying the entire service tax liability when there are
more than one service providers collectively providing a service is not
in violation of any provisions of the Finance Act, 1994; in the case of
Rashtriya Ispat Nigam Ltd. vs. Dewan Chand Ram Saran 2012 (26)
S.T.R. 289 (S.C.) the Hon'ble Apex Court has upheld that liability in
indirect tax can be transferred. Further, this ratio of the Apex Court
has been approvingly adopted - Delhi Transport Corporation vs
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Commissioner of Service Tax [2015 (38) STR 673 (Del)] which was
further maintained by the Hon'ble Supreme Court [2016 (45) S.T.R.
J53 (S.C.)] and Jitendra Singh Bagga vs Chhattisgarh State Civil
Supplies Corporation Ltd [2015 (40) STR 69 (Chhattisgarh)].
13. Learned counsel further submits that the notice clearly
communicates the fact that the service tax has been paid by the
Appellant on the entire commission received by them from the airlines
by treating such commission as cum-duty; the only allegation in the
notice is that the Appellant has collected and retained service tax from
the sub-agent also in addition to the tax component which was
anyway collected from the airlines; the impugned order goes beyond
the scope of the notice to suggest that though the Service Tax was
paid on the commission by treating it as cum-duty, if the value was
not to be treated as cum-duty, then the liability would have been
higher. He submits that this observation that the commission is not to
be treated as inclusive of Service Tax is a wrong observation because
nowhere in the notice has it been contended that the value is not
cum-duty; notwithstanding that fact, even if it be assumed for a
moment that the value of commission is not cum-duty, in that case,
the demand for duty, if any that was short paid, had to be made
under section 73 or 74 of the Finance Act, 1994 as applicable and
subjecting the cum-duty value to tax on the entire cum-duty value is
equivalent to imposing tax on tax.
14. Learned counsel submits further that the Service Tax liability has
already been discharged in the instant matter by the Appellant before
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the commission earned is shared with the sub-agents; Therefore, to
again demand service tax on the same transaction is improper and
amounts to asking for payment of Service Tax twice; the Appellant as
a service provider has collected the tax from the airline who is the
service recipient and has deposited such tax to the Department;
however, while transferring the share of the commission to the sub-
agents, the Appellant has transferred their share post tax since the
tax stands paid by the Appellant; therefore, the Appellant has not
collected any tax whatsoever from the sub-agents. He submits that
there is no demand under Section 73A in the instant matter; the
service tax collected from the airline as part of the commission is
legally proper since the airline is the service recipient; the Appellant
and its sub-agents are the service providers; once such service tax is
collected, it has to be deposited with the exchequer which has been
complied by the Appellant; since the service tax deposited by the
Appellant included the service tax share of the sub-agent, the
accounting entries in the invoice indicate the sharing of the amount
equivalent to the service tax portion to the sub-agent; therefore,
section 73A is not applicable. He submits that when the demand itself
is unsustainable, the demand of interest does not stand.
15. Learned Authorized Representative for the Department reiterates
the findings of the OIO and rebuts the submissions of the Learned
Counsel for the appellants. On the appellant's contention that Section
73(A)(2) of the Finance Act, 1994 does not apply in the present case,
he takes us through the provisions of Section 73A and submits that
contention of the appellant, that since they are a registered service
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tax and have been discharging Service Tax on the services rendered
by them therefore, the proceedings against them can only be initiated
under sub-section (1) of Section 73A and not under sub-section (2) of
Section 73A, is not sustainable and reliance placed on Hon'ble CESTAT,
Mumbai Final Order No. A/93128/16/STB dated 13.04.2016 in the
case of HDFC Standard Life Insurance Company Limited, is not
helpful; it is apparent that the sub-section (1) of Section 73(A), deals
with the cases where the amount collected is in excess of the Service
Tax assessed or determined and paid on any taxable service under the
provisions of Finance Act, 1994; it covers those cases where an
assessee collected an excess amount of Service Tax, to the amount
which were required to be collected; on the other hand, sub-section
(2) deals with those cases where the amount was not required to be
collected but where it was illegally collected it from their customers,
representing it Service Tax; the findings of the adjudicating authority
are clear on the issue. He submits that reliance on the case of HDFC
Standard Life Insurance Co. Ltd is misplaced as the case was about
service tax paid under reverse charge mechanism on commission paid
to the agents and recovered part of service tax from the agents who
are actually the service providers in the case.
16. Learned Authorized Representative submits on the contention of
the appellant that the proceedings are based on incorrect perception
of the business of the appellant which was just cash flow
adjustment/accounting and that the law does not debar for
transferring/shifting tax incidence of tax liability basis the legally
entered contractual terms, that during the period 2010-11 to 2011-12,
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the appellants were discharging their Service Tax liability by exercising
the option available under Rule 6(7) of the Service Tax Rules, 1994and
with effect from 01.04.2012, they have been paying Service Tax under
Commission Model.
16.1 . He submits that all the airlines, to whom M/s TSIYPL were
providing their services, were members of IATA who entered into an
agreement titled "Passenger Sales Agency Agreement" with the
appellants; in pursuance of the above agreement with airlines (IATA),
the appellants were providing their services for the sale of air
transportation services to be provided by the airlines; All monies
received by the appellants from the customers on behalf of the
airlines, including the commission due to them, were property of the
airlines held by them in trust for the airlines as per Billing &
Settlement Plan (BSP) of IATA; the appellants were not issuing any
invoices to the airlines for the services, provided to them; the agents
after retaining their consideration/commission, remit the balance
amounts to the respective airlines; the commission received/retained
by the appellants from the airlines was the full consideration for the
services provided by the appellants to the airlines; Since, the
commission received by the appellants from the airlines was inclusive
of the applicable Service Tax, the appellants were discharging their
Service Tax liability after calculating the assessable value of the
services by reverse calculation from the gross consideration received
by them; Shri Sandeep Garg, General Manager of the appellants, in
his statement dated 12.10.2015said that the agreement also indicates
that commission and incentives paid to M/s TSIYPL were inclusive of
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Service Tax.
16.2 . He submits that the majority of the air tickets booked by the
appellants were booked through various sub travel agents, who were
providing their services to the appellants in relation to the booking of
tickets of the airlines and in lieu thereof, the appellants were paying
them consideration in the form of commission at agreed percentage;
the consideration received by the appellants from the airlines was
inclusive of Service Tax; however, the appellants were also collecting
an amount as representing Service Tax from the sub-agents & the
other customers of the air transportation services of the airlines, but
were not depositing the same to the credit of the Government.
16.3 . He submits that the appellants were paying Service Tax under
Basic Fare Model and Commission Model. Explaining with the help of
sample invoices, he submits that while working under Basic Fare
Model, the appellants collect an amount (as representing Service Tax)
from the sub-agents/customers of airlines, which was equal to the
amount of Service Tax (calculated on the Base Fare of the airfare)
payable by them on the Air Travel Agent's services provided by them
to airlines; the said amount was shown as Service Tax in the invoices
issued by the appellants to the sub-agents/ customers for the tickets;
for example in invoice No. ZXJ8XF dated 17.09.2011, issued by the
New Delhi Branch Office of M/s TSIYPL, to the customer Mr. Alain
Passagne, the appellants paid Service Tax of Rs. 342/-@ 1.236% on
Rs. 27,630/- (Base Fare of the ticket) and they collected an equivalent
amount from the customer.
15 ST/60903/2017
16.4 . He submits that the appellants, while working under the
commission model, were to pay Service Tax at full rate on the
commission received by them from the airlines; they paid the same by
treating the commission received from the airlines as inclusive of
Service Tax; the appellants also collected an amount as representing
Service Tax from the sub-agents/customers, which was calculated at
the applicable rate of Service Tax on the commission paid to the sub-
agent or discount given to other customers and the amount so
collected was also shown as Service Tax in the invoices issued by the
appellants; for example, in Invoice No. Al/13-14/B2659006 dated
26.03.2014, issued, by the Head Office of the appellants, to M/s
Mahabir Travel & Tours, the appellants paid Service Tax on the taxable
value arrived at by reverse calculation, from the gross commission
received by them from the airlines; the tickets were booked through
the sub-agent M/s Mahabir Travel & Tours; the appellants were to pay
commission of Rs. 82.18/- (Rs. 33.67/-+ Rs. 48.51/) to the sub-
agent; the appellants deducted the commission amount of Rs. 82.18/-
from the amount of Rs. 5405/- to be received by them from the sub-
agent; in addition, they included Service Tax of Rs.10/- calculated @
12.36% on Rs. 82.18/ and thus an amount of Rs. 5333/- was received
by M/s TSIYPL from the above sub-agent.
16.5 . He submits that Shri Sandeep Garg, General Manager of the
appellants, in his statement dated 12.10.2015, explained that they
had collected an amount as representing Service Tax from all
customers/sub-agents at the rates specified in Rule 6(7) of the service
16 ST/60903/2017
Tax Rules, 1994, up to the period 31.03.2012; thereafter, they
collected the said amount at the prescribed rate of Service Tax on the
value of commission passed on to sub-agents; the branches of the
appellants were separately registered with the jurisdictional Service
Tax authorities up to the period 31.03.2013; they had been collecting
Service Tax from the sub-agents & customers. Learned AR submits
that the appellants were providing services to the airlines and
receiving consideration for the same from them in the form of
commission/PLB; The commission/PLB received by them from the
airlines was inclusive of Service Tax; the same was deposited, treating
the net commission amount as inclusive of Service Tax, with the
Government exchequer; they also collected an amount as
representing Service Tax from the sub-agents/ clients; most of the
customers of the appellants were travel agents, who further booked
the air tickets provided to them by M/s TSIYPL; therefore, the
contention of the appellant that proceedings are based upon an
incorrect perception of the business model/ arrangement between
Appellant and the other travel agents is only a cash flow
adjustment/accounting method, does not hold good.
17. Learned Authorized Representative further submits that the
appellants contention that there is no bar to recover such service tax
contractually, is not sustainable; the intention of law is clear; Section
73A of the Act stipulates that any service tax collected in excess/or
which is not required to be collected is recoverable; therefore, the
adjudicating authority has correctly held so and distinguished the case
law relied upon by the appellants; Hon'ble Supreme Court, in the case
17 ST/60903/2017
of Dilip Kumar & Company, held that the Taxing Statute has to be
interpreted strictly, without looking into its consequences. He submits
that once statutory provisions are there, no tribunal can go beyond
the statutory provisions, as held by Hon'ble Apex Court in the case of
UOI Vs Willo wood Chemicals Pvt Ltd. -2022 (60) GSTL 3 (SC);
Larger Bench of this Tribunal in case of Veer Overseas-2015
(18) GSTL 59 (Tr. LB) has also held that CESTAT being the
creature of statute itself cannot go beyond the statutory
provisions.
18. Learned Authorized Representative submits also that the
appellant's contention that even if it is assumed that the appellant
has collected service tax from sub agents/customers, still 73A(2) is
not applicable as the entire amount stands paid to the Central
Government, is not sustainable; the adjudicating authority rightly
held that the appellant have deposited only that amount of Service
Tax, which they have collected from the airlines by considering the
commission, received from the airlines, as inclusive of Service Tax and
not the service tax recovered from sub-agents; Learned Commissioner
distinguished the case laws relied upon by the appellants.
19. Learned Authorized Representative submits in addition that the
appellant has contention that merely because Service Tax has been
discharged by them by treating the commission received from the
airlines as inclusive of Service Tax does not mean that they have
recovered Service Tax from the airlines; they were contractually
18 ST/60903/2017
eligible to recover the Service Tax from the sub-agents; there was no
double recovery of Service Tax in this case; there was no loss of
revenue to the government as the entire Service Tax on the total
commission received from the airlines has been deposited by them at
the very first leg of the transaction is factually incorrect as rightly held
by the Adjudicating Authority, who has also correctly distinguished the
cases relied upon by them and has given elaborate findings.
20. Learned Authorized Representative submits in rebuttal to the
contention that Service tax cannot be demanded twice on the same
transaction that the case of Department is not demand of any service
tax on the commission received by the sub agents but in respect of
recovery made by them in the name of service tax from its sub
agents/customers, under the provisions of Section 73 (A)(2) of the
Finance Act; department has not demanded any Service Tax on the
commission received by the sub-agents. He submits that the
adjudicating authority held that the appellant were the agents of the
airlines and received commission from them for booking of air ticket;
they paid Service Tax on it by treating it as cum-tax; the amount of
Service tax deposited by them was collected by them from the
airlines. The appellant separately collected an amount representing as
Service Tax from the sub-agents/customers on the commission they
shared with sub-agents and retained it with them; such retention was
illegal; the judgments relied upon by the appellant pertains to the
double payment of Service tax on the same transaction, which is not
the issue in the instant case; hence, are not relevant.
19 ST/60903/2017
21. Learned Authorized Representative submits on the claim of
revenue neutrality that as held by the Adjudicating Authority the said
contention of the appellant is untenable as no demand has been made
from the sub-agents and therefore, the argument on the availability of
CENVAT credit is misplaced; Apex Court decision in the case of
Northern Operating Systems Pvt. Ltd. that the incidence of taxation, is
entirely removed from whether, when and to what extent, Parliament
chooses to recover the amount; Larger Bench of the Tribunal also held
in the case of Melange Developers Pvt. Ltd. that A sub-contractor has
to discharge the Service Tax liability when he renders taxable service.
The contractor can, as noticed above, take credit in the manner
provided for in the CENVAT Credit Rules of 2004.
22. Rebutting the appellants plea that no interest is payable, Learned
authorised Representative, takes us through the provisions of Section
73 B and submits that the provisions are very clear and unambiguous
on the issue; the person liable to pay the amount determined under
sub-section (4) of section 73A, shall also be liable to pay interest at
applicable rate. Learned authorised Representative submits on the
issue of time bar that Section 73A deals with cases where an amount
representing as Service Tax has been collected and the where no such
Service Tax was actually leviable under the Act; time limit is only
applicable to demands under Section 73; the present issue is
recovery of an amount representing as Service Tax under Section
73A; the machinery to recover the amount is provided in sub-section
20 ST/60903/2017
3 of Section 73A and no time limit is specified for demanding the
amount in Section 73A; Hon'ble Apex court in the case of Raghuvar
(India) Ltd 2000 (118) ELT 311 (S.C.) held that time limit of 1 year is
applicable only in respect of demand under Section 11A; same view
was taken by Hon'ble CESTAT in the cases of Utkal Asbestos 2000
(120) ELT 235 (CEGAT) and Tisco v. CCE 2001 (132) ELT 198; further,
CESTAT held in the case of Vimal Moulders (I) Ltd 2004 (164) ELT 302
(Tri. Del) that no time limit prescribed in Section 11D of Central Excise
Act, 1994; Section 11D of Central Excise Act, 1994 is parimateria with
Section 73A of the Finance Act,1994.
23. Heard both sides and perused the records of the case. Brief
issue to be decided in the case is Whether the amount collected by the
appellant from the sub-agents/customers, representing as Service Tax
was illegal and is liable to deposit it to the credit of the Central
Government under the provisions of Section 73A(2) of the Finance Act
1994 or not ?
24. We find that it would be beneficial to have a look at the
provisions of Section 73A. It reads as under.
SECTION [73A. Service tax collected from any person
to be deposited with Central Government. --
(1) Any person who is liable to pay service tax under
the provisions of this Chapter or the rules made
thereunder, and has collected any amount in excess of
the service tax assessed or determined and paid on any
taxable service under the provisions of this Chapter or
the rules made thereunder from the recipient of taxable
service in any manner as representing service tax, shall
forthwith pay the amount so collected to the credit of
the Central Government.
21 ST/60903/2017
(2) Where any person who has collected any
amount, which is not required to be collected, from any
other person, in any manner as representing service
tax, such person shall forthwith pay the amount so
collected to the credit of the Central Government.
(3) Where any amount is required to be paid to the
credit of the Central Government under sub-section (1)
or sub-section (2) and the same has not been so paid,
the Central Excise Officer shall serve, on the person
liable to pay such amount, a notice requiring him to
show cause why the said amount, as specified in the
notice, should not be paid by him to the credit of the
Central Government.
(4) The Central Excise Officer shall, after considering
the representation, if any, made by the person on
whom the notice is served under sub-section (3),
determine the amount due from such person, not being
in excess of the amount specified in the notice, and
thereupon such person shall pay the amount so
determined.
(5) The amount paid to the credit of the Central
Government under sub-section (1) or sub-section (2) or
sub-section (4), shall be adjusted against the service
tax payable by the person on finalisation of assessment
or any other proceeding for determination of service tax
relating to the taxable service referred to in sub-section
(1).
(6) Where any surplus amount is left after the
adjustment under sub-section (5), such amount shall
either be credited to the Consumer Welfare Fund
referred to in section 12C of the Central Excise Act,
1944 (1 of 1944) or, as the case may be, refunded to
the person who has borne the incidence of such
amount, in accordance with the provisions of section
11B of the said Act and such person may make an
application under that section in such cases within six
months from the date of the public notice to be issued
by the Central Excise Officer for the refund of such
surplus amount.]
25. The appellants are engaged in providing the Air Travel Agent's
services to various airlines, who are members of IATA; on behalf of
the member airlines, IATA had entered into an agreement titled
"Passenger Sales Agency Agreement" with the appellants to act as
22 ST/60903/2017
their agent to provide their services for the sale of air transportation
services provided by the member airlines; passengers intending to
book air tickets for their travel may approach the appellant (either
directly or through their agents) for booking of the air ticket;
depending on the requirement, the Appellant may advise the
customers/other agents about the flight timings, seat availability etc;
the Appellant also collect the gross air fare from the passengers either
directly or through other agents and remits it to the airlines; as a
consideration for services provided, the Appellant receives commission
from the airlines and discharge their service tax liability under the
category of "Air Travel Agent's" Services under Section 65(4) read
with Section 65(105)(1) of the Finance Act 1994. The appellants had
two options for the purposes of payment of service tax; During the
period 2010-11 to 2011-12, the appellants were discharging their
Service Tax liability by exercising the option available under Rule 6(7)
of the Service Tax Rules, 1994 (i.e. Basic Fare Model) and with effect
from 01.04.2012, they have been paying Service Tax under
Commission Model.
26. In the normal course, the appellants would have received the
payment from the customers and would have remitted to the Airlines
who in turn would have paid commission to the appellants, who would
have paid service Tax on the amount received as commission. As the
appellants have availed the services of sub-agents, the appellants
were required to pay a portion of the commission to the sub-agents.
as per the industry practice, the sub-agent collects the money from
23 ST/60903/2017
Customers, withholds the amount that they were entitled to receive,
though theoretically the amount was supposed to flow from the
appellants to the subagent. The appellants who discharge service tax
on the entire commission received from airlines, shares the
commission with his sub agents' part of their commission; Since the
agent is sharing the commission with the sub-agent, they are also
collecting the portion of the service tax that is payable by the sub-
agent. Revenue wants to interpret this transaction to be the service
tax collected by the appellants from the sub-agent and as the service
tax stands already paid, on receipt of the commission from Airlines,
the appellants are again collecting the same from the sub-agents and
are not depositing the same with exchequer.
27. Learned counsel for the appellants presents thematic diagrams of
the theoretical as well as practical transactions to make it understand
in a better perspective as below.
Theoretical Transaction.
24 ST/60903/2017
Actual Transaction
28. Learned Counsel submits that the transaction under question is
the sharing of revenue between the Agent and the sub-agent after the
agent has received the revenue (commission inclusive of service tax)
from the airlines; such gross commission received is cum-duty i.e., it
is inclusive of the service tax component. Learned counsel explains
the revenue sharing, payment of Tax etc, assuming that such gross
commission is Rs.500, in the following thematic diagram. He explains
that if service tax payable, on cum-duty basis on the commission
received from Airlines, Rs. 45.45, the appellant pays entire tax of Rs.
25 ST/60903/2017
45.45 on the transaction and recovers Rs 36.36 representing the Tax
payable by the sub agent; He submits that it should also be born in
mind that though the appellant received Rs 500 from Airlines as
Commission and paid Service tax of Rs 45.45 on the same, only Rs
9.09 is payable by them as they received only Rs 90.91 Rs as
commission; Rs 363.63 being transferred to the sub-agent, Tax of Rs
36.06 is recovered from the sub-agent.
29. We find that learned Counsel, refers to an actual invoice, No.AI/
13-14/B2659006 dated 26.03.2014, issued by the appellants to sub-
agent M/s Mahabir Travel & Tours and submits that first amount, of
Rs. 4782.60 and 616.00, shown in this invoice, was for booking two
international air tickets from Dacca to Kolkata; the amounts are
inclusive of service tax, on the air ticket, discharged by the airline;
next amount mentioned, of Rs. 82.18 (IATA discount of Rs. 33.67 and
Performance Linked Bonus of Rs. 48.51), was the commission that M/s
26 ST/60903/2017
Mahabir Travel & Tours (as sub-agent) was withholding; this amount
is subtracted in the invoice; on this commission of Rs.82.18, Service
Tax of Rs. 10 (@ 12,36%) stands paid by the appellant on receipt of
the commission from the airline. We find that the sub-agent pays not
only his portion of service Tax but TDS of Rs. 8.22 to the appellant;
the portion of the Service Tax component sharable by the sub-agent
by the agent is shown in the same invoice to account for the sharing
of the tax too. Hence this amount is added in the invoice.
30. We find that these examples given by the learned counsel for the
appellants show that Service Tax liability is shared between the agent
and sub-agent; the same is reflected on the invoice; no extra service
tax is collected from sub-agent. It is apparent that the invoice serves
to capture set of multiple transactions. Firstly, transaction is the
amount payable by the customer to the airlines, including the service
tax. Secondly, the payment of commission to the agent by airlines;
thirdly, payment of service tax by the agent and/or sub-agent and
lastly, the sharing of the commission by between the agent and sub-
agent. It appears that instead of transferring the entire money
received from the customers to the Airlines, the sub-agent transfers
the money after retaining his part of the commission and transfers the
balance money. Airlines, pay commission to the Appellant Agent;
appellant pays service tax on the entire commission; issues invoice to
the subagents showing the share of his commission already retained
and the service tax portion which he has to bear for the same.
27 ST/60903/2017
31. We find that in the entire transaction there is nothing to indicate
that an amount representing as service tax that is collected and
retained by the appellants. We find that due to an understanding
between the appellant and the sub-agent, the liability of the the sub-
agentto pay this Service Tax to the exchequer, is shifted to the
Appellant and an accounting entry is made as the liability stands
discharged at the hands of the Appellant. We find that effectively, the
service tax on the portion of the amount of commission paid to the
sub-agent is discharged first by the appellant and thereafter
recovered. His portion of the commission (net of service tax) is
already withheld by the sub-agent. Therefore, it cannot be said that
the appellants have recovered service Tax from their agents and have
not paid it. It can also be seen that the appellants have also recovered
the TDS amount deducted by the Airlines, corresponding to the
amount of commission payable to the sub-agent. It is not the case of
the department that the Income Tax authorities have also viewed the
transactions similarly and have issued a Notice to the appellants to
recover the said TDS. The only plausible conclusion is that what was
recovered was the service Tax already paid by the appellants on the
commission actually retained by the sub-agent; no service tax is
actually collected by the Appellant which is payable or recoverable
under Section 73A.
32. We find that the appellants submitted a Chartered Accountant
certificate, which was issued after verifying the amounts for the FY
28 ST/60903/2017
2013-14, pertaining to the transactions in question, based on the
Appellant's book of audited books of accounts, ST-3 returns, TDS
returns. As per the certificate, as explained by the Counsel, total
commission received by M/s TSI Yatra Pvt Ltd from various airlines
during the FY 13-14, for the services collectively provided by M/s TSI
Yatra Pvt Ltd and its sub-agents is Rs 64,78,19,523/-; Service tax
liability, duly discharged by M/s TSI Yatra Pvt Ltd, jointly on behalf of
themselves and the sub-agents on such the commission received was
Rs 8,00,70,493 (12.36% of 64,78,19,523); actual ST paid during
the FY 13-14 amounts to 8,03,35,707 (since it includes ST on
advances received) as evidenced from the Appellant's ST-3 Returns;
Share of the commission accruing to M/s TSI Yatra Pvt Ltd out of the
total commission received from the airlinesRs 18,36,06,074 (out of
total commission of Rs 64,78,19,523/-); Share of the commission
accruing to various sub-agents of M/s TSI Yatra Pvt Ltd out of the total
commission received from the airlines is Rs 46,42,13,449 (out of Rs
64,78,19,523/-; Applicable TDS withheld by M/s TSI Yatra Pvt Ltd on
(4) as evidenced from the TDS ledger is Rs 4,46,16,336/-; Service
tax liability of the sub-agents is Rs 5,73,76,782/- and amount
actually recovered by the appellants from sub-agents is Rs
5,68,49,738
33. We find that the learned Counsel for the appellants submits, in
addition to the macro level findings as above, an analysis of a sample
set of documents, precisely the invoice No. AI/13-14/B2659006 dated
26.03.2014, which the agent M/s TSIYPL, has issued to sub-agent M/s
29 ST/60903/2017
Mahabir Travel & Tours, and the one which the impugned show cause
notice refers to. We find that the Chartered Accountant certified the
truthfulness of the transaction and the averments of the appellants,
after going through the said invoice and corresponding sale &
purchase vouchers. It is certified that the first transaction contained in
this invoice is for booking two international air tickets from Dacca to
Kolkata for total flight ticket prices of Rs. 4782.00 and 615.00
(totaling INR 5397 as per the Sales Voucher); the second transaction
contained in this invoice is the commission that M/s Mahabir Travel &
Tours (as sub-agent) is withholding i.e. Rs. 82.18 (IATA discount of Rs.
33.67 and PLB (Performance Linked Bonus) of Rs. 48.51); on this
commission of Rs.82.18, ST @ 12,36% is Rs. 10 which stands paid by
M/s TSIYPL to the govt (on behalf of the sub-agent) upon receiving
the commission from the airlines; this Service Tax component paid on
behalf of the sub-agent by the agent is now shown in the same invoice
to account for the sharing of the tax component; hence this amount is
added in the invoice.
34. We find that the Service tax shared between the agent and sub-
agent gets shown on the invoice; it is not actually extra service tax
that is collected from sub-agent; as such, there is no amount
representing as service tax that is collected and retainedby the
Appellant. We are of the considered opinion that the Service Tax
component is shown on the invoice for the sake of clarity in
accounting between the agent and sub-agent. The actual tax liability is
30 ST/60903/2017
already paid by the agent when it receives the commission from the
airline.
35. Learned counsel for the appellants submits that the impugned
order travels beyond the points alleged in the Show Cause Notice. On
going through the impugned Show Cause Notice and the orders, we
find that the Revenue is not clear as to their allegations. Show Cause
notice asserts that the commission received by the appellants from
the Airlines is Cum-Duty in nature.
12. --------M/s TSIYPL discharged their Service Tax
liability on the consideration received by them from
airlines, after computing the assessable value by
reverse calculation method, i.e., by treating the
consideration as inclusive of Service Tax.
18. ----------The commission/PLB received by M/s
TSIYPL from the airlines was inclusive of all taxes and
M/s TSIYPL also treated the commission or transaction
fee received by them from the airlines as inclusive of
Service Tax and paid Service Tax on the same by
arriving at the taxable value by reverse calculation
method.
36. Learned Commissioner However, finds that though the Service
Tax was paid on the commission by treating it as cum-duty, if the
value was not to be treated as cum-duty, then the liability would have
been higher.
A-4(ii) The notice have contended that merely
because Service Tax has been discharged by them by
treating the commission received from the airlines as
inclusive of Service Tax does not mean that they have
recovered Service Tax from the airlines. I find that the
argument put forth by the Noticee is irrelevant as
they have discharged their liability by treating the
commission as inclusive of Service Tax. Had they not
treated the commission as inclusive of Service Tax
then their liability would have increased.
31 ST/60903/2017
37. We find that the Show Cause Notice alleges that the appellants
also illegally collected an amount as representing Service Tax from
the sub-agents by wrongly impressing upon them that they (M/s
TSIYPL) were providing services to the sub-agents and therefore,
they (M/s TSIYPL) were entitled to collect Service Tax from them;
M/s TSIYPL did not deposit the amount collected by them as
representing Service Tax, with the Government exchequer. During
investigations, M/s TSIYPL failed to provide any legal
justifications/statutory authority under which Service Tax was
collected by them from their sub-agents/customers of the airlines.
We do not any evidence in the Notice to allege that the appellants
impressed upon their sub-agents that they were providing certain
services and therefore, are eligible to collect some service tax from
them.
38. However, the impugned Show Cause Notice alleges and the OIO
affirms that that the appellants have collected Service Tax from their
sub-agents and have not deposited to the exchequer and therefore,
such amount representing the service tax is recoverable under the
provisions of Section 73A; Both the impugned order and the OIO do
not specify as to what service was being rendered by the appellants
to their sub-agents. In view of our discussion above and the
Chartered Accountants Certificate, it is clear that the appellants have
not collected any Service Tax form the sub-agents over and above
the Service Tax they have paid on receipt of the commission from
the Airlines. As the sub-agents have already deducted the
32 ST/60903/2017
commission due to them, it was necessary to them to share the tax
burden too. This is a purely revenue sharing and tax burden sharing
mechanism. Demanding payment of service tax from the appellants
on the portion of the commission shared by them with the sub-
agents, would amount to double taxation, as the Service tax on the
total Commission stands discharged by the appellants as explained
above.
39. It is not the case of the department that the incidence of Service
Tax cannot be passed on or shared. in the case of Rashtriya Ispat
Nigam Ltd Vs Dewan Chand Ram Saran 2012 (26) STR 289 (SC), the
Hon'ble Apex Court held that liability in indirect tax can be transferred.
Hon'ble Supreme Court held that:
26. As far as the submission of shifting of tax
liability is concerned, as observed in paragraph 9
of Laghu Udyog Bharati (supra), service tax is an
indirect tax, and it is possible that it may be
passed on. Therefore, an assessee can certainly
enter into a contract to shift its liability of service
tax. Though the appellant became the assessee
due to amendment of 2000, his position is
exactly the same as in respect of Sales Tax,
where the seller is the assessee, and is liable to
pay Sales Tax to the tax authorities, but it is
open to the seller, under his contract with the
buyer, to recover the Sales Tax from the buyer,
and to pass on the tax burden to him. Therefore,
though there is no difficulty in accepting that
after the amendment of 2000 the liability to pay
the service tax is on the appellant as the
assessee, the liability arose out of the services
rendered by the respondent to the appellant, and
that too prior to this amendment when the
liability was on the service provider. The
provisions concerning service tax are relevant
only as between the appellant as an assessee
under the statute and the tax authorities. This
33 ST/60903/2017
statutory provision can be of no relevance to
determine the rights and liabilities between the
appellant and the respondent as agreed in the
contract between two of them. There was
nothing in law to prevent the appellant from
entering into an agreement with the respondent
handling contractor that the burden of any tax
arising out of obligations of the respondent under
the contract would be borne by the respondent.
40. Hon'ble Delhi High Court followed the above principle in Delhi
Transport Corporation Vs CST 2015 (38) STR 673 (Del) upheld by
2016 (45) STR J53 (SC) and held that:
18. The service tax liability in Rashtriya Ispat
Nigam Limited (supra) arose out of contract
given out for transportation of goods. The
contractor engaged had undertaken to ―bear and
pay all taxes, duties and other liabilities in
connection with discharge of his obligation‖. The
contractor had invoked the arbitration clause for
raising a dispute as to its liability to pay service
tax. The claim petition was dismissed by the
arbitrator which award was challenged by a
petition under Section 34 of Arbitration and
Conciliation Act before a Single Judge of Bombay
High Court. The Learned Judge held that insofar
as the service liability is concerned, the appellant
(RashtriyaIspat Nigam Limited) which had given
the contract was the assessee and liable to tax.
The appeal preferred against the said order on
the petition was dismissed by the Division Bench
of the High Court.
19. Against the backdrop of the above-noted
facts in civil appeal carried to Supreme Court, it
was observed as under: -
―37. As far as the submission of shifting of tax
liability is concerned, as observed in para 9 of
Laghu Udyog Bharati v. Union of India, (1999) 6
SCC 418, service tax is an indirect tax, and it is
possible that it may be passed on. Therefore, an
34 ST/60903/2017
assessee can certainly enter into a contract to
shift its liability of service tax.
38. Though the appellant became the assessee
due to amendment of 2000, his position is
exactly the same as in respect of Sales Tax,
where the seller is the assessee, and is liable to
pay Sales Tax to the tax authorities, but it is
open to the seller, under his contract with the
buyer, to recover the Sales Tax from the buyer,
and to pass on the tax burden to him. Therefore,
though there is no difficulty in accepting that
after the amendment of 2000 the liability to pay
the service tax is on the appellant as the
assessee, the liability arose out of the services
rendered by the respondent to the appellant, and
that too prior to this amendment when the
liability was on the service provider.
39. The provisions concerning service tax are
relevant only as between the appellant as an
assessee under the statute and the tax
authorities. This statutory provision can be of no
relevance to determine the rights and liabilities
between the appellant and the respondent as
agreed in the contract between two of them.
There was nothing in law to prevent the
appellant from entering into an agreement with
the respondent handling contractor that the
burden of any tax arising out of obligations of
the respondent under the contract would be
borne by the respondent. ―
20. The above ruling of Supreme Court in the
case of RashtriyaIspat Nigam Limited (supra),
however, cannot detract from the fact that in
terms of the statutory provisions it is the
appellant which is to discharge the liability
towards the Revenue on account of service tax.
Undoubtedly, the service tax burden can be
transferred by contractual arrangement to the
other party. But, on account of such contractual
arrangement, the assessee cannot ask the
Revenue to recover the tax dues from a third
party or wait for discharge of the liability by the
assessee till it has recovered the amount from its
contractors.
35 ST/60903/2017
41. The ratio of above cases was adopted in Jitendra Singh Bagga Vs
Chhattisgarh State Civil Supplies Corporation Ltd 2015 (40) STR 69
(Chhattisgarh). The unmissable take away from the ratio of the above
cases is that if there is a contract between the parties, the tax burden
can be shifted or shared between parties. The appellants and their
sub-agents were following this pattern for years and therefore, it has
to be interpreted that there was a contract between the Appellant and
their sub-agents for such an arrangement. The contract could be
written or oral or it can be an understanding. As long as there is no
dispute raised by either of the parties, it can be implied that there is a
contract. If it was the case of the Revenue that the appellants have
rendered some service to their sub-agents and have received some
consideration and hence are liable to pay service Tax, department was
free to raise a demand on them under the other provisions and not
certainly under Section 73A.
42. It is to be borne in mind that the appellants are not rendering any
service to their sub-agents.it is incorrect to allege that the appellants
are rendering some service to their sub agents; they are collecting
service Tax from them and are not depositing the same with the
exchequer. It is apparent that though the show Cause Notice stated
that the appellants are rendering some service to the and they can
collect service tax from the agents and the same must have been
deposited with the exchequer. When the Show cause Notice could not
go any further on such allegation, it has taken recourse to the
provisions of Section 73A. Both the appellants and their sub-agents
are rendering the ‗Air Travel Agent' Service' together. It is pertinent to
36 ST/60903/2017
note here that the legislature recognises the fact that there would be a
chain of agents in the business of ‗Air Travel Agency' and therefore,
the law gives the option to the agents to pay service Tax on the basis
of Base fare or the commission, in the pre and post negative list era.
If the agents had chosen to pay Service Tax on the basis of Basic Fare,
it would have entailed in payment of service tax on the basis fare by
the number of agents in the chain, which does not seem to be the
intent of the legislature.
43. Therefore, it has to be construed that appellants and their sub-
agents are rendering the ‗Air Travel Agent service. As a natural
corollary, they share the commission and so, the tax burden. While
alleging that the appellants have collected an amount representing
service Tax form their sub-agents, Revenue has conveniently ignored
the fact that the commission was also shared. It is not the case of the
Revenue that tax burden cannot be shared more so, when
remuneration is shared. There is no law forbidding such sharing of the
tax burden when Revenue is shared. We are of the considered opinion
that Revenue cannot enrich itself on the strength of procedural
variations and accounting practices of the appellant.
44. We find that Principal Bench of the Tribunal in the case of Jaipuria
Infrastructure Developers Pvt. Ltd. - 2014 (36) STR 696 (Tri. Del.)
held that reimbursement of service tax already paid is permissible.
The Bench held that:
37 ST/60903/2017
9.----
-----
As is seen from the above, the Revenue's contention is that the appellant, who has collected the amount, was required to deposit the same himself with the Revenue. We find no justification for the above stand of the department. Admittedly, the appellant is the owner of the flats, who is selling the same to its customers. The value of said flat is being recovered by the appellant from the buyer and all the taxes payable to the Government are to be collected by him from their buyers along with the cost of the flats. Whether such Service Tax collected by them from the buyers is deposited directly with the department by themselves or is deposited with the Revenue by the contractor being the job worker for the appellant is immaterial as long as Service Tax so collected is deposited. The Revenue cannot be allowed to receive Service Tax twice in respect of same construction activities, once from the contractor and the second time from the person who has collected the same. As such, we do not agree with the adjudicating authority that the appellant was required to deposit the Service Tax collected by him from his customers, once again in terms of provisions of Section 73A, even though the same stand already deposited with the Revenue, through the contractors.
45. We find that the impugned order confirms the duty demanded under the provisions of Section 73A (2). In order to conclude that there was a violation of Section 73A (2), three questions have to be satisfied i.e. (i). Whether any amount was collected as representing service tax that was not required to be collected? (ii). Whether such amount collected was retained? And (iii). If not retained, whether it was not deposited with the exchequer? We find, in view of the above discussion that no amount was actually collected as representing service tax from the sub-agent that was not required to be collected.
38 ST/60903/2017 What the appellants collected from their sub-agents was the portion of the service Tax which was payable by the sub-agents but was paid by the appellants on receipt of the commission from Airlines. Since, the appellants have shared the Commission received from Airlines with the sub-agents, they have also shared the tax burden. There is no provision in the statute barring such sharing of tax burden. Revenue conveniently ignored the fact of sharing of remuneration, given by the Airlines, by the appellant and their sub-agents. Therefore, it was wrong to seek tax again on the sharing of Tax burden. Tax on the total remuneration was discharged. Demanding service tax again on the portion of sub-agent's commission would amount to double taxation. There was no amount, which was actually collected as representing service tax from the sub-agent that was not required to be collected. Revenue cannot enrich itself on the strength of procedural variations and accounting practices of the appellant. The amount shown as service tax in the invoice issued by the appellants is to account for the sub-agent's share of service tax. No case is made by revenue for invocation of the provisions of Section 73A.
46. We find that the Principal Bench of the Tribunal decided a case involving identical facts, in the case of M/s. Riya Travel & Tours vide Final Order NO's. 58616-58642/2024 dated25.09.2024 holding that the appellant was justified in charging service tax from the sub-agents and this service tax had been deposited by the appellant with the government. Thus, the provisions of section 73A (2) of the Finance Act would not be applicable. The case of Riya Travel and Tours was also 39 ST/60903/2017 investigated by the Directorate General of Central Excise Intelligence, who investigated the case which culminated in the issue of impugned order against the appellants.
47. In the result, the appeal is allowed, with consequential relief, if any, as per law.
(Order pronounced in the open Court on 20/12/2024) (S. S. GARG) MEMBER (JUDICIAL) (P. ANJANI KUMAR) MEMBER (TECHNICAL) PK