Customs, Excise and Gold Tribunal - Tamil Nadu
Sky Lift Cargo (P) Ltd. vs Commissioner Of Service Tax on 5 May, 2008
Equivalent citations: 2008[11]S.T.R.471
ORDER P.G. Chacko, Member (J)
1. After examining the records, we find that the appellants are air cargo agents of various airlines and are also a member of the IATA. In the impugned order, ld. Commissioner confirmed the demand of service tax of Rs. 93,11,332/- along with Education Cess against them for the period 1.4.2003 to 31.3.2006 and imposed on them penalties under Sections 76 & 78 of the Finance Act 1994 totaling to over Rs. 1.5 crores. The service tax demand is in the category of "Business Auxiliary Service" under Section 65(19) of the said Act. Business Auxiliary Service (BAS, for short) was introduced as a taxable service w.e.f. 1.7.2003. Therefore, the demand for the period prior to 1.7.2003 is, at once, unacceptable. For further purposes, we would consider the period from 1.7.2003 to 31.3.2006 as the period of dispute. During this period, the appellants received commission from various airlines, on whose behalf they booked cargo and collected freight charges from the consignees. It appears from the records that the entire demand of service tax is on the commission received by the appellants from the airlines. Ld. counsel for the appellants has fairly accepted the position that air cargo agents and air travel agents stand on the same footing insofar as their relation with airlines is concerned. In this context, ld. JCDR has relied on the decision of this Bench in ETA Travel Agency Pvt. Ltd. v. Commissioner 2007 (7) STR 454 (Tribunal) and Translanka Air Travel Pvt. Ltd. v. Commissioner 2007 (7) STR 476 (Tri.-Chennai), wherein we held that the said air travel agents were liable to pay service tax in the category of BAS on overriding commission received by them from the respective airlines. Prima facie, the appellants were liable to pay service tax in the same category on the commission received by them from the airlines during the period of dispute.
2. Ld. counsel has also raised the plea of limitation against the demand of service tax. It is submitted that the proviso to Section 73(1) of the Finance Act 1994 was not invocable in the facts and circumstances of this case. It is submitted that, on the subject of taxability of the aforesaid commission, there was a spate of correspondence between appellants and the department and that the department was in the know of all the relevant facts and cannot allege suppression against them. In this context, ld. counsel has also referred to para 15.9 of the impugned order, wherein the adjudicating authority relied on an order dt. 13.12.05 of the Director-General of Service Tax (DGST). Ld. Commissioner observed that the order of the DGST was duly communicated to the Air Cargo Agents Association and that their liability to pay service tax in the category of BAS, on commission received from airlines was clearly known to them through DGST's order. In this connection, ld. counsel has pointed out that DGST had passed the said order pursuant to a direction of the Hon'ble High Court of Bombay and that the Hon'ble High Court had withdrawn that direction in a review petition filed by the association. According to ld. counsel, after the withdrawal of the High Court's direction, the DGST's order will have no legal consequences and, therefore, the extended period of limitation was not to be invoked on the strength of that order. Ld. counsel has also pointed out that the cum-tax benefit under Section 67(2) of the Finance Act was not allowed by the Commissioner. Ld. JCDR submits that the extended period of limitation was invoked on the ground that the appellants had suppressed a part of the commission received by them from airlines, in their service tax returns for the period from 10.9.2004.
3. After giving careful consideration to the submissions, we note that neither the DGST's order nor the circumstances associated therewith will have anything to do with the factum of suppression by the assessee of a part of the amount of commission received from the airlines. It is significant to note that this suppression of a part of the amount of commission in service tax returns has not been mentioned by ld. counsel. All that he submitted was that the collection of commission by the assessee from the airlines was within the knowledge of the department. However, there is no mention, in the impugned order, of any suppression of amount in service tax return by the assessee for the period prior to 10.9.04. Considering all these facts into account, we are inclined to hold, for the present purpose, that at least a part of the demand of service tax for the larger period of limitation is not hit by limitation. The SCN was issued in June 2007 for demanding service tax and other dues for the period upto 31.3.2006. In any case, the appellants cannot prima facie resist the demand of service tax for the normal period. In the circumstances, we direct them to predeposit an amount of Rs. 20,00,000/- (Rupees twenty lakhs only) for the purpose of Section 35F of the Central Excise Act as applicable to service tax maters. There being no plea of financial hardships in the present application, we direct the appellants to predeposit this amount within 4 weeks and report compliance on 16.6.2008.
(Dictated and pronounced in open court)