2023 (9) TMI 720 - CESTAT NEW DELHI

Levy of service tax - Tour Operator service - organising tours for foreign tourists to India - reverse charge mechanism - period July 2012 to March 2014 - Extended period of limitation - HELD THAT:- There is no dispute that the appellant is provided tour operator services and has been paying service tax on the services and has been filing ST-3 returns. To provide these services, the appellant hires taxis. Thus, the services of the taxi operators are the input services to the appellant - From the invoices produced, it is evident that the taxi operators were paying service tax on their services considering themselves liable to pay service tax and the appellant has been taking CENVAT credit of such service tax. To charge service tax again on reverse charge basis from the appellant (the service recipient) would result in double taxation on the same service.

Even otherwise, the notification refers to persons ‘not in the same line of business’ and NOT ‘persons engaged in the same business’ and the two are distinct. ‘Similar line of business’ has a much wider connotation and therefore, it includes their tour operator services as well. Since the appellant is in the similar line of business, it was not covered S. No. 7 (a) of the notification.

Extended period of limitation - HELD THAT:- There are no grounds to invoke the extended period of limitation under the proviso to section 78(1). There is no fraud or collusion or wilful mis-statement or suppression of facts or violation of the Act or Rules with an intent to evade payment of service tax.

Revenue Neutrality - HELD THAT:- If the appellant had paid service tax under reverse charge mechanism, it would have been entitled to CENVAT credit on it immediately because it is its input service. Thus, the entire exercise is revenue neutral and in such a situation, the appellant cannot be alleged to have had an intent to evade payment of service tax.

The demand in the impugned order needs to be set aside. Consequently, the interest and penalties also need to be set aside - Appeal allowed.