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2020 (3) TMI 376 - AT - Service TaxValuation - air travel agent service - taxable value of services has been computed under rule 6 (7) of the Service Tax Rules, 1994 - invocation of extended period of limitation - Recovery of CENVAT Credit - HELD THAT:- Under rule 6 (7) of the Rules, a person is liable to pay service tax in relation to the services provided by an air travel agent, has an option to pay an amount calculated @0.6% of the basic fare in case of domestic bookings and @1.2% of the basic fare in case of international bookings. ‘Basic fare’ has been defined in the Explanation to mean that part of the air fare on which commission is normally paid to the air travel agent by the airlines. According to the appellant, commission is normally not paid to the air travel agents by the airlines on fuel surcharge and, therefore, commission, if any, received from the four airlines out of the seventy three airlines for fuel surcharge could not have been subjected to service tax under rule 6 (7) of the Rules. It is a fact that though a defence was taken by the appellant in reply to the show cause notice that the commission received on fuel surcharge could not have been subjected to levy of service tax under rule 6 (7) of the Rules, but there is no discussion of this issue in the impugned order. The appellant contends that out of the seventy three airlines only four airlines pay commission on fuel surcharge and, therefore, it cannot be said that commission is normally paid to the air travel agent by the airlines on fuel surcharge. It was, therefore, obligatory on the part of the Principal Commissioner to have considered this issue raised by the appellant in response to the show cause notice, but that has not been done. The matter, therefore, has to be remitted to the Principal Commissioner to decide this issue - It is only when this issue is decided against the appellant, that would be necessary for the Principal Commissioner to take recourse to the provisions of section 72 of the Act for determination of the taxable value. This issue again would have to be decided by the Principal Commissioner afresh as it has been submitted by the learned Authorized Representative of the appellant that a new method was adopted by the Principal Commissioner without providing any opportunity to the appellant to make submission. The impugned order dated 29 February 2016 deserves to be set aside and is set aside - Appeal allowed - decided in favor of appellant.
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