Customs, Excise and Gold Tribunal - Bangalore
P.C. Poulose vs The Commissioner Of Customs And Central ... on 19 December, 2007
Equivalent citations: 2008[10]S.T.R.335, [2007]14STT82
ORDER T.K. Jayaraman, Member (T)
1. This appeal has been filed against Order-in-Appeal No. 104/2006 dated 25.05.2006 passed by the Commissioner of Customs & Central Excise/Appeals) Cochin.
2. The appellant is a proprietor of M/s. Sparkway Enterprises. He is engaged in the activity of collecting "Airport Admission Ticket Charges" on account of a licence issued by the Airport Authority of India. Revenue proceeded against the appellant on the ground that he is providing amenities and facilities to the passengers and the services rendered by him amounts to airport services and therefore they are liable to pay the service tax. The Original Authority confirmed demand of Rs. 1,67,388/-. He imposed penalty of Rs. 100/- per day till the payment of dues in terms of Section 76. An amount of Rs. 3,282/- was also demanded under Section 91 of the Finance Act with appropriate interest on both the demands under Section 75. The appellants approached the Commissioner (Appeals). The Commissioner (Appeals) upheld the order of the Lower Authority.
3. Ms. Rukmani Menon, learned Advocate, appeared on behalf of the appellant and Shri. K. Sambi Reddy, learned JDR, for the Revenue.
4. The appellants have raised several contentions. First of all in terms of the agreement between the appellant and the Air Port Authority of India, the appellant is authorized to collect entrance fee from the visitors for availing the facility of the lounge and various other facilities in the Airport. The Revenue's contention is that this is the service rendered by the appellant and therefore he is liable to pay service tax on the amount collected by him. On the other hand, the appellants have pleaded that the liability of paying service tax is on the Airport Authority only. They are not providing any services, the services are actually provided by the Airport Authority of India. The appellant was only authorized to collect the prescribed admission charges. It was also pleaded that the AAI had sought clarification from the CBEC on the subject and the clarification was communicated vide AAI's letter dated 24.02.2005 and hence they cannot be penalized for the non-payment of the service tax by way of penalty and interest. They have stated that from 01.04.2005, they have started collecting the service tax as authorized by AAI vide their letter-dated 24.02.2005. The Commissioner (Appeals) has not accept their plea and upheld the impugned order.
5. On a very careful consideration of the issue, we find that in terms of a contract between the appellant and the Airport Authority of India, the appellant is authorized to collect entrance fee from the visitors for entering the lounge and availing the various facilities. Just because the appellant is authorized to collect the fee and remit it to the Airport Authority of India. we cannot say that the service is provided by the appellant. Appellant is only collecting agent and whatever is collected after giving the licence fee he retains it. In this case, in our view, the actual liability is only rests with the AAI. In terms of the agreement, AAI may ask the appellant to collect the service tax also. But ultimately the liability rests only with the AAI who is actually providing the services. A person who simply collects the entrance fee cannot be equated with the service provider. Therefore, we do not find any merit in the demand in respect of the appellant and also there is no justification for imposition of any penalty, especially when the Airport Authority directed him not to collect any service tax until the clarification was received from the Board. Therefore, we do not find any merit in the impugned order of the Lower Authority which has been upheld by the Commissioner (Appeals). Therefore, we allow the appeal with consequential relief.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)