The Ahmedabad Bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that service tax payable on tour planning services even if planned for non-taxable territory like Jammu & Kashmir.
The bench of Ramesh Nair (Judicial Member) and Raju (Technical Member) has observed that the entire activity of planning, Scheduling, Organizing And Arranging is undertaken in the taxable territory in the instant case. The taxable service is the activity of Planning, Scheduling, Organizing and Arranging. In these circumstances, even if the client tours a non taxable territory, while the service of Planning, Scheduling, Organizing and Arranging is provided in taxable territory, the service will remain taxable as provided in taxable territory. The tax has therefore been rightly demanded.
Background
The appellant/assessee is engaged in providing Tour Operator Service. The customers of the appellant can be divided broadly into two categories namely Customers of Pre-Planned Package Tour and Customers of Customised Tour.
The present dispute relates to both these types of tours made to Jammu & Kashmir (J&K). A show cause notice was served to the appellant for the period from 2006-07 to 2010-11 and demand made was confirmed. The demands were upheld by the Commissioner (Appeals) and consequently, these appeals have been filed.
Arguments
The assessee contended that the appellant had bonafied belief that the services provided by them or not taxable relying on section 64 of Finance Act, 1944 and on departmental letter F. No. V/GST/03/GEN/INS/01/2004 dated 17.08.2004. The appellants were under the impression that Service Tax being destination based Consumption tax. The services provided by them were not taxable. The extended period of limitation cannot be invoked as there was no intent to evade duty. The matter was related to interpretation of statute. It was also argued that under EA-2000 audit for the period of October, 2005 to March 2009 taken up in the month of May, 2009. The entire gambit of the appellants activities were scrutinised under audit.
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Conclusion
The tribunal held that the service provider is located in the taxable territory. The service recipient is also located in the taxable territory. It is the claim of the appellant that the service is performed partly within India but partly in territory excluded from the jurisdiction of Finance Act, 1994 by virtue of Section 64. According to the appellant place of the performance of Service is relevant.
The tribunal while allowing the appeal held that the assessee may not have had any intent to evade payment of duty as a person might hold bonafide belief in the instant case that he is not liable to levy of service tax. No specific act of mis-declaration or suppression has been pointed out in the earlier proceedings. Consequently, an extended period of limitation cannot be invoked for recovery of taxes.
Case title: Heena Tours & Travels v/s C.C.E. & S.T.-Surat
Citation: Service Tax Appeal No.10241 of 2014
Date of Decision: 20.09.2024
Counsel for the Petitioner: Shri. S.S.Gupta, Advocate & Shri. Mehul Jivani, CA
Counsel for the Respondent: Shri Himanshu P Shrimali, Superintendent (AR)
