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2014 (6) TMI 626 - AT - Service TaxDemand of service tax - Computer Reservation System (CRS / GDS) - services relating to the reservation of ticket availability position through on line computer system - whether "Online Database Access or retrieval Service" was received by the appellant M/s British Airways during the period from 18/04/2006 to 31/05/2008 from foreign based CRS service provider and liable to service tax in terms of section 66A of the Finance Act, 1994 on reverse charge mechanism basis - Difference of opinion - Majority order - Held that:- M/s British Airways, India has to be treated as a separate person. If that be so, in view of the admitted position that the contract between CRS/GDS companies is not with M/s British Airways, India and is only that M/s British Airways, UK, the present appellant cannot be held to be recipient of the services so as to make him liable to pay service tax, on reverse charge basis, in terms of the provisions of Section 66A. British Airways, UK having received the services, which stands provided by CRS companies located outside India and the consideration for which stands provided by British Airways UK. The same stands consumed in UK only inasmuch as the Server provided by CRS/GDS companies to IATA agents are connected between the two of them and such services are being utilised by the travel agents. Service is consumed by the persons receiving the same. The service having been provided by a foreign based company to a foreign based head office there cannot be any liability of the present appellant to discharge its service tax, inasmuch as service tax being a destination and consumption based tax cannot be created against the non-consumer of the services. It is also not the Revenue's case that British Airways, India has made any payments for the services so procured by British Airways, U.K. In fact on the contrary, it is admitted position that the entire consideration for the services stand paid by British Airways to the CRS/GDS companies. The appellant in the present case is only appointing IATA agents, dealing with them, collecting sale proceeds of the tickets sold by them and remitting the same to the head office. They are not, in fact, even using the said service directly and as such can, by no stretch of imagination held to be service recipient in India so as to pay any service tax. Extended period of limitation - Revenue neutral exercise - Held that:- Admittedly British Airways India is discharging its service tax liability in respect of air transportation tickets sold by them. The present demand confirmed against them, was admissible to them as Cenvat credit, which could have been further utilised for discharge of their service tax liabilities - demand, having been raised by invoking the longer period of limitation is hit by the provisions of Section 11A of the Act. If non-registration and non-filing of returns is the criteria for rejecting the appellant's plea of bona fide belief and holding against them, the plea of limitation would not be available to any assessee, inasmuch as the service tax liabilities would arise only in those cases where the appellants are not registered and are not filing the returns. If an assessee entertained a bona fide belief that inasmuch as the service is not being received by him, and he is not required to pay any tax, he cannot be blamed for the same. Further the fact that the entire exercise was Revenue neutral is also one of the factors to be considered in support of the appellant's plea of bona fide belief. If the appellant would have paid the said tax, they would have been entitled to the credit of the same and would have been in a position to use the same in discharge of their admitted service tax liabilities - demand is barred by limitation and is required to be set aside along with setting aside of penalty - decided in favour of assessee.
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