Custom, Excise & Service Tax Tribunal
M/S Tomas Cook (India) Ltd vs Commissioner Of Central Excise And ... on 8 August, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL BANGALORE FINAL ORDER Nos. 21303 - 21306 / 2014 Appeal(s) Involved: ST/2096/2010-DB, ST/524/2010-DB, ST/75/2011-DB, ST/975/2011-DB [Arising out of the Orders-in-Original No. 16/2010-S.T. dated 29.3.2010, 52/2009-S.T. dated 21.12.2009, 17/2010 dated 31.5.2010 and 31/2010 dated 05.5.2010] M/s TOMAS COOK (INDIA) LTD H.No.6-1-57, NASIR ARCADE, SAIFABAD, HDYERABAD-500004 Appellant(s) M/s COX & KINGS (INDIA) LTD 8-2-618, ANAM PLAZA, ROAD, NO.11, BANJARA HILL, HYDERABAD. Appellant(s) M/s TRAVEL CORPORATION LTD, TELESTAR BUILDING, POST BOX 2427, M.G. ROAD,RAVIPURAM, COCHIN-16 Appellant(s) M/s TRAVEL CORPORATION INDIA LTD 201 VIJAYSRI NIVAS, 1-11/254/255, NAIK'S ESTATE, NEAR AIRPORT, BEGUMPET, HYDERABAD-500 016 Appellant(s) Versus Commissioner of Central Excise and Service Tax, HYDERABAD-II L.B STADIUM ROAD, BASHEERBAGH, HYDERABAD - 500004 Respondent(s)
Commissioner of Central Excise and Service Tax, COCHIN C. R. BUILDING, I S PRESS ROAD, ERNAKULAM, COCHIN - 682018 Respondent(s) Appearance:
Mr. G. SHIVADASS, ADVOCATE WORLD TRADE CENTRE NO.404-406, 4TH FLOOR, SOUTH WING BRIGADE GATEWAY CAMPUS NO.26/1, DR. RAJKUMAR ROAD, MALLESWARAM . BANGALORE - 560 055. For the Appellant Mr. S. Teli, A. R. For the Respondent CORAM :
HON'BLE SHRI B.S.V. MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER ________________________________________ Date of Hearing: 08/08/2014 Date of Decision: 08/08/2014 Per B.S.V. MURTHY After a brief explanation provided by learned counsel for the appellants about the issue involved and the decision of the Tribunal in the cases of M/s Swagatam Tours Pvt. Ltd. & Others (including the appellants herein, M/s Cox & Kings India Ltd. & M/s Travel Corporation India Ltd.) reported in 2013-TIOL-1907-CESTAT-DEL, we find that the decisions of the tribunal cover the issue involved in the present appeals before us. There is no dispute that the issue is same and a common order can be passed.
2. In order to facilitate a better understanding of the issue, brief synopsis submitted by learned counsel on behalf of the appellants is given below :
Particulars M/s Cox & Kings (I) Ltd. M/s Thomas Cook (I) Ltd. M/s Travel Corporation India Ltd. M/s Travel Corporation India Ltd. Appeal No. ST/524/2010 ST/2096/2010 ST/75/2011 St/975/2011 Period Involved 10.9.2004 to 31.3.2009 10.9.2004 to 31.3.2009 01.4.2004 to 31.3.2009 10.9.2004 to 31.3.2009 Demand (in Rs.) 4,11,34,255/- 7,04,67,520/- 62,59,120/- 69,41,600/- Penalties under Finance Act,1994 Under Sections 76,77 & 78 of Act Under Sections 77 & 78 of Act Under Section 77 & 78 of Act Under Section 77 & 78 of Act.
Submissions :
The assessees operate and facilitate outbound tours whereby Indian tourists are provided services in relation to tourism outside the Indian territory, to visit foreign locals.
No part of the journey, (commencing from India or on return to India after conclusion of the tour) is in a tourist vehicle. The commencement of outbound journey or the conclusion of the tour at the Indian destination is normally by air transport, to and from a foreign location.
It is asserted by the assessees, an assertion that is not disputed by Revenue, that the facilities provided by each of the assessees includes providing a tour leader to accompany the touring party throughout the tour; besides scheduling the tour package, operating the packaged tour, fixing the probable dates and venues, the itinerary; booking accommodation in hotels at foreign locations; planning and arranging travel through various modes in foreign locations; sightseeing, boarding and lodging abroad; providing foreign guides, air ticketing and arranging visa and travel insurance etc. These activities clearly comprise operating the tour, in addition to planning, scheduling, organizing or arranging the tour.
The nature of the composite services provided by the assessees, in relation to outbound tours, is thus clearly outside the locus of the definition of tour operator, qua the first facet of the definition, even after amendment of the definition, with effect from 10.9.2004.
Relied on the following decisions :
(i) Cox & Kings (India) Ltd. vs. CCE, Delhi 2013-TIOL-1907-CESTAT-DEL
(ii) Travel Corporation (India) Ltd & Thomas Cook (India) Ltd. vs. CCE, Mumbai (Order No. A/1138 & 1139/14/CSTB/C-I dated 03.7.2014 (CESTAT, Mumbai).
3. There is no dispute that the appellants were regularly paying service tax from the income received towards Air Travel Agency Service and Tour Operator Service excluding income received from Out Bound Tours (OBT). Revenue has entertained a view that in respect of OBT also, the appellants should discharge service tax liability.
4. In the case of M/s Cox & Kings India Ltd., the appellants provided three types of OBT packages namely, (a) Duniya Dekho (escorted group tours); (b) Super Saver (Economised escorted group tours; and (c) FLEXIHOL (tailor-made holidays). The appellants have also pre-printed brochures/booklets for the above package tours. According to the terms of OBT, the tour per se begins at the foreign destination commencement point and ends at the same point by completion of tour. Appellants provide a complete package to their customers.
5. In the case of M/s Travel Corporation India Ltd., the appellants have been paying service tax in respect of services except OBT. In this case also, the appellants have standard packages for different tours to different parts of the world. In this case also, the appellants provide a complete package and the tours start from the point abroad and ends at the same point. The same facts are applicable in the case of M/s Thomas Cook India Ltd.
6. In similar cases considered by the Tribunal and two appellants before us (M/s Cox & Kings India Ltd. & M/s Travel Corporation of India Ltd.) were parties therein also, the Tribunal after a detailed consideration of all the issues involved, recorded their conclusions in paragraphs 21 & 22 of the order which are reproduced herein below :
21. Summary of our conclusions:
(a) "Tour operator" qua Section 65 (115) of the Act defines the expression in terms of two facets. The business of planning, scheduling, organizing or arranging tours by any mode of transport (including arrangement for accommodation, sightseeing; or similar services), including where the tour is by a tourist vehicle covered by a permit issued under the provisions of the Motor Vehicles Act, 1988 or the Rules made thereunder, is one facet of the definition. Operating of tours in tourist vehicle covered by a permit granted under the provisions of the 1988 Act or the Rules made thereunder (including the planning, scheduling, organizing or arranging of such tours) is another and a distinct facet of the definition. Within the scope of first facet of the definition, the activity of operating of the tour is excluded;
(b) As a consequence of the interpretation of "tour operator" vide [a], where a person pursues a composite activity of operating tours and the planning, scheduling, organizing or arranging of such tours, by a mode of transport other than by a tourist vehicle (covered by a permit issued under the provisions of the Motor Vehicles Act, 1988 or the Rules made thereunder), such activity falls outside the scope of the definition of "tour operator";
(c) The consideration received for operating and arranging outbound tours (provided by the appellants and consumed by tourists beyond the territory of India) is not liable to levy and collection of service tax under the provisions of the Act, since the taxable event is the provision of a taxable service; and not the pursuit of the profession, of a taxable service providers. The Act authorizes the levy and collection of tax for providing a destination and consumption based taxable service but does not authorize levy and collection of tax, for a service provided and consumed beyond the Indian territory; and
(d) Without prejudice to the conclusions summarized in (a) to (c) supra, we hold:
(i) Planning and scheduling of outbound tours may not be components of services provided to tourists, would amount to an incidental activity undertaken as a prelude to providing tours and thus the service if at all provided is to the service provider itself. Nevertheless, since organizing and/or arranging of outbound tours are components of the service provided to tourists and these are the primary and substantive purposes of the service provided and consumed, the composite activity of planning, scheduling, organizing or arranging tours falls within the scope of the taxable service defined in Section 65(115) of the Act;
(ii) Whether an outbound tour amounts to export of service and is thus immune to levy of service tax, under the Export of Service Rules, 2005 is not decided and is left open, as not necessary in view of our ruling on other issues;
(iii) The assessees would be entitled to abatement benefits in terms of any exemption/abatement benefits provided qua Notifications issued by the Central Government under Section 93(1) of the Act, but subject to fulfillment of the conditions enjoined in such Notifications;
(iv) Invocation of the extended period of limitation, for assessment and levy of service tax, interest and penalties is unjustified. Levy and collection of service tax, interest and penalties within the normal period limitation would however be valid;
(v) Imposition of penalties, in the circumstances of the lis is unjustified. No penalties could be imposed; the statutory discretion under Section 80 of the Act is applicable in the facts and circumstances of the cases; and ought to be invoked.
22. The appeals are allowed as above, but in the circumstances without costs. It is quite clear that the issue before us in respect of all the appellants is covered by paragraph 21(b) and therefore, the activity is out of purview of service tax liability.
7. In result, as was done in the appellants own case before the Tribunal in the decision cited before us, in this case also, the appeals are allowed with consequential relief, if any, to the appellants.
(Operative portion of the order has been pronounced in open court) (S.K. MOHANTY) JUDICIAL MEMBER (B.S.V. MURTHY) TECHNICAL MEMBER /vc/