2018 (11) TMI 1804 - CESTAT MUMBAI - Service Tax

Head Note / Extract:
Classification of services - Business Auxiliary Services or not - rendering of services as an air travel agent - HELD THAT:- On perusal of the statutory provisions vis-a-vis the activities undertaken by the appellant, we find that the appellant is not an agent, working on behalf of the customers for facilitating purchase of tickets from the GSAs. The customers approaching the appellant for booking of tickets are not aware about the particular GSA, who issues the ticket through the appellant. In order to fall under the purview of business auxiliary service, there must be involvement of three parties namely, the service provider, service receiver and the agent facilitating procurement of service for and on behalf of the service provider. In other words, all the three parties involved in the contract must be known to each other, in order to be classifiable under such head of service. It is an admitted fact on record that for booking of ticket, the passenger only approached the appellant and not the GSA. Verifying the economic aspect, the sub-agent, like the appellant approaches a particular GSA for booking of tickets. Thus, in absence of any connection between the GSA, the appellant and its customer, the activities cannot be considered as a service, exigable to service tax under the taxable category of business auxiliary service. Since, GSA’s payment of service tax under air travel service was accepted by the department, contrary stand cannot be taken to fasten the tax liability on the appellant under a different category of service namely, business auxiliary service - there are no reason to sustain the adjudged demands confirmed on the appellant. Appeal allowed - decided in favor of appellant-assessee.