TMI Blog2012 (7) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... es on predetermined routes in scheduled hours under such permit can be held to have undertaken the business of planning, scheduling, organizing or arranging tours squarely covered by the main part of the definition of "tour operator" under Section 65(115). Claim of benefit of Notification No.20/2009-ST dt. 07/07/2009 read with corrigendum dt. 31/08/2009 merits consideration - the said Notification granted full exemption from payment of service tax on the taxable service referred to in Section 65(105)(n) of the Finance Act, 1994, provided by a tour operator having contract carriage permit or tourist vehicle permit for inter-State or intra-State transportation of passengers, excluding tourism, conducted tours, charter or hire services Remand the case back to pass speaking orders after upholding the taxability of the assessee's activities under Section 65(105)(n) to consider the claim for exemption under Notification No.20/2009-ST and re quantify the taxable value considering plea that income from stage carriage was also included in the taxable value, excluding luggage and parcel charges from the taxable value and 'cum-tax value' - in favour of assessee by way of remand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them claimed that they were not operating 'tours' in this sense and hence not liable to pay service tax under the head "Tour Operators' Service". The adjudicating authorities rejected this contention and confirmed the demands of service tax and education cess, with interest thereon, against the assessees. Penalties were also imposed on the parties. Where the orders in adjudication of the show-cause notices were passed by the jurisdictional Commissioners, the aggrieved parties are in appeal to the Tribunal. Where the Orders-in-Original were passed by officers below Commissioner's rank, the assessees went in appeal to the jurisdictional appellate Commissioners. Where the appellate Commissioners' decision was wholly or partly adverse to the assessees, the latter are in appeal to the Tribunal. In one case, the Commissioner(Appeals) demanded service tax from the assessee (M/s. Ideal Travels) only on the amount collected by them from the passengers of vehicles which were used to conduct tours under tourist permits and this part of the Order-in-Appeal is under challenge in the assessee's appeal No.ST/844/2010. The demand of service tax on collections from passengers of the vehicles cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arting skill or knowledge or lessons on any subject or field;" An exemption Notification No.52/98-ST dt. 18/07/1998 had been issued by the Central Government exempting "tour operator's service" from payment of service tax. However, this exemption was available only upto 31/03/2000. Therefore, w.e.f. 01/04/2000, only a person who was engaged in the business of operating tour in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 would be termed "Tour Operator". b. The appellant obtained tourist vehicle permits under Section 2(43) of the Motor Vehicles Act, 1988 as no contract carriage permits were being granted in Karnataka since 1976 consequent to nationalization of such permits under the Karnataka Contract Carriages (Acquisition) Act, 1976. Private bus operators in Karnataka, therefore, could obtain only contract carriage permits under the Motor Vehicles Act, 1988. For the purpose of transporting passengers in certain routes within Karnataka and inter-State, the bus operators started taking tourist permits under Section 2(43) of the Motor Vehicles Act, 1988. During the period of dispute, the appellant was merely transporting passengers on a poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rators was given retrospective effect from 01/04/2000 by Parliament under Section 75 of the Finance Act, 2011. All these legislative measures would also go to show that, during the material period, there was doubt regarding taxability of the service of tour operators. Therefore, the appellant cannot be held to have suppressed any fact with intent to evade payment of service tax. The demand of service tax for the extended period is, therefore, barred by limitation. g. Hon'ble Supreme Court's judgments in the cases of Padmini Products v. Collector of Central Excise 1989(43) ELT 195 (SC), CCE v. Chemphar Drugs Liniments 1989(40) ELT 276 (SC) and Pushpam Pharmaceuticals Co. v. Collector of Central Excise 1995 (78) ELT 401 (SC) relied on in support of the plea of limitation. 5. Apart from adopting the above arguments of the lead Counsel, the Advocates, Consultants and Authorised Representatives of other assessees made specific submissions pertaining to their respective cases: a. The Counsel for M/s. Ideal Travels (Sl. No.1) submitted that the taxable value adopted by the lower authority was as high as 12.5 times the income shown in the relevant Income Tax Returns and that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lace, intra-State or inter-State, in vehicles with stage carriage permits and/or tourist vehicle permits. This activity clearly fell within the meaning of "tour" defined under Section 65 of the Finance Act, 1994 and the assessees who operated the tours were rightly held to be "tour operators". Therefore, the business undertaken by the assessees was taxable under Section 65(105)(n) of the Act. The buses of the assessees were run on pre-determined routes and at scheduled times, which would mean that the assessees were planning, scheduling, organizing or arranging tours. This activity was squarely covered by the first limb of the definition of "tour operator" w.e.f. 10/09/2004. Ld. JCDR relied on the following judgments;- 1. Suresh Kumar Sharma v. Union of India [2007] 7 STT 249 (Kar.) 2. L.V. Sankeshwar v. Superintendent of Central Excise [2007] 6 STT 31 (Kar.) 3. Secretary, Federation of Bus Operators Association of Tamils Nadu v. Union of India [2007] 6 STT 49. Claiming support from the said decisions, it was argued that the taxing authority was entitled to levy service tax from any person who transported tourists under a tourist permit. 7. The lead Counsel, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termined routes in scheduled hours under such permits, they can be held to have undertaken the business of planning, scheduling, organizing or arranging tours. In other words, the assessees are squarely covered by the main part of the definition of "tour operator" under Section 65(115) of the Finance Act, 1994 w.e.f. 10/09/2004. We note that the meaning of "tour operator" assigned by Parliament prior to 10/09/2004 continued on the statute book as it stood incorporated in the inclusive part of the definition of "tour operator" from 10/09/2004. The assessees who were engaged in the business of operating tours in tourist vehicles covered by permits granted under the Motor Vehicles Act, 1988 or the rules made thereunder were covered by this meaning of "tour operator" also. The findings recorded by the authorities below on the taxability of the assessees' activities are well-founded. The assessees have no case on merits. 10. However, their alternative plea for the benefit of Notification No.20/2009-ST dt. 07/07/2009 read with corrigendum dt. 31/08/2009 merits consideration. The said Notification granted full exemption from payment of service tax on the taxable service referred to in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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