Custom, Excise & Service Tax Tribunal
Al Hind Tours And Travels P Ltd vs Calicut on 9 May, 2025
Service Tax Appeal No. ST/21382/2016
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
BANGALORE
REGIONAL BENCH, COURT NO. 2
Service Tax Appeal No. 21382 of 2016
(Arising out of Order-in-Original No. CAL-EXCUS-000-COM-001-16-17
dated 20.05.2016 passed by the Commissioner of Central Excise,
Customs & Service Tax, Calicut Commissionerate, Kerala.)
M/s. AL-Hind Tours and Travels (P) Ltd.,
5/3410-M52, Markas Complex,
Mavoor Road,
Kozhikode - 673 004. ..........Appellant
Versus
Commissioner of Central Excise, Customs
and Service Tax,
C.R. Building,
Mananchira,
Calicut - 673 001. ........Respondent
Appearance:
Mr. G. Jayaprakash, Advocate for the Appellant. Mr. Rajesh Shastry, Superintendent (AR) for the Respondent.
Coram:
Hon'ble Mr. P.A. Augustian, Member (Judicial) Hon'ble Mr. Pullela Nageswara Rao, Member (Technical) Final Order No. 20580 /2025 Date of Hearing: 21.11.2024 Date of Decision: 09.05.2025 Per: P.A. Augustian The Appellant is registered under service tax including Air Travel Agency services. On the basis of audit report, it is alleged that the Appellant who had received income in the form of productivity linked bonus (PLB) from different Airlines for achieving certain targets of tickets sale for which no service tax was paid for the period from February 2010 to September 2014. And considering such as falling under the category of 'business Auxiliary Service' defined under Section Page 1 of 3 Service Tax Appeal No. ST/21382/2016 65(19) r/w 65(105)(zzb) of the Finance Act, 1994 up to 30.06.2012 and thereafter taxable as per Section 65B(44) of the Act, issued show cause notice and Adjudication authority as per the impugned order dated 11.04.2016 confirmed the demand. Aggrieved by said order, present appeal is filed.
2. When the appeal came up for hearing, the Ld. Counsel for the Appellant submits that the Appellant having registered under the category of Air Travel Agency service and had paid service tax as applicable from time to time. The incentives allegedly considered as consideration in the present show cause notice is linked to the performance and received as a bonus for the dedication, commitment and long-standing support extended by the Appellant to the Airlines. PLB is only a reward from the Airlines and Appellant have no role in the determination in quantum of PLB in contrast with the commission earned on selling tickets to passengers.
3. When the appeal came up for hearing, the Ld. Counsel for the Appellant submits that the issue is no more res integra and it is squarely covered by the decision of the Tribunal in the matter of M/s SOTC Travel Services Pvt. Ltd., Vs. Principal Commissioner of Central Excise, Delhi-I-2023 (6) Centax 156 (Tri. - Del) and it was upheld by Hon'ble Supreme Court (2023 (6) Centax 160). The issue is also considered by the Larger Bench in the matter of M/s Kafila Hospitality & Travels Pvt. Ltd., Vs. Commr. of S.T., Delhi (2021 (47) GSTL 140 (Tri. - LB).
4. The Ld. AR fairly admits that the issue is considered and covered by the decision of Larger Bench.
5. Heard both sides. It is an admitted fact that the issue is no more res integra and Larger Bench in the matter of M/s Kafila Hospitality & Travels Pvt. Ltd. (supra) held that;
"86. In the light of the aforesaid discussion and findings, the answers to the six issues that have been referred to the Larger Bench are as follows: -
First issue : The incentives received by a service recipient from a service provider cannot be subjected to levy of service tax."Page 2 of 3
Service Tax Appeal No. ST/21382/2016
6. In view of the above discussion and following the ratio of the decision of Larger Bench in the matter of M/s Kafila Hospitality & Travels Pvt. Ltd. (supra), the appeal is allowed with consequential relief, if any, in accordance with law.
(Order pronounced in Open Court on 09.05.2025) (P.A.Augustian) Member (Judicial) (Pullela Nageswara Rao) Member (Technical) hr/Sasi Page 3 of 3