Service Tax
TRT-2025-
Cestat New Delhi
Date:-30-09-22
In:-
Issue Favourable to Tax Payer ?:-
Key Pointers:
- The Appellant, M/s Creative Travels Pvt Ltd, was issued four show cause notices pertaining to 2004-05 to 2011-12, which was disposed by Order dated 17 October 2013 that confirmed taxability of amounts expended for meeting operational costs of overseas offices and of the payments received for arranging and operating of ‘outbound tour’ services.
- The Appellant being aggrieved, by the demand of ₹ 1,19,84,588 and penalties under section 76, section 77 and section 78 of Finance Act, 1994, and Commissioner of Service Tax, Delhi, aggrieved by the non-inclusion of interest under section 75 of Finance Act, 1994 even as recovery of tax was ordered.
- The first notice dated 8th April 2010, covered expenditure of the representative office of the appellant on salary, telephone and other expenses which were detailed as overseas sales trips, participation in international and national travel industry fairs and e-mail marketing and the adjudicating authority determined these to have been consideration for procurement of ‘business auxiliary service’ taxable under section 65(105)(zzb) of Finance Act, 1994.
- The other component of the demand in the impugned order arose from the proposal to tax the activity of the appellant-assessee in relation to ‘tour operator service’ taxable under section 65(105)(n) of Finance Act, 1994 since 10th September 2004 with the activity defined in section 65 (115) of Finance Act, 1994 for the period up to 2011-12.
- The Tribunal observed that present dispute, insofar as it concerns the period up to March 2012, are covered by the settled decision, consequently, demand is not leviable.
- The issue remaining for resolution is the scope of the expanded definition of section 65(115) of Finance Act, 1994 impacting the activities of the appellant in relation to foreign travel undertaken by the customers during the disputed period.
- Tribunal observed that the activity is rendered outside India during the disputed period for which consideration has been received in convertible foreign currency. The exemption from tax is claimed on the backing of substantial performance abroad. As the consideration claimed to have been received in pursuance of exports has not been controverted in the impugned order, neither the issue of liability of interest on demand that has not fructified nor the contention relating to inapplicability of the decision of the Tribunal in Cox & Kings India Ltd has to be decided upon in this appeal.
- Hence, Impugned Order is set aside, Appellant appeal is allowed and Revenue appeal is dismissed.
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