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TMI Blog2011 (6) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue authorities that the services rendered by the assessee in the said lounge as regarding providing food, drinks, giving amenities, facilities to the passengers at airport like space to sit & relax and watch TV, read newspapers & magazines, providing of liquor, computer with internet facilities etc. will be services rendered which would be covered under the category of "Airport services" as provided under section 65(105)(zzm) of the Finance Act, 1944. Coming to such a conclusion, Show Cause Notice was issued to the assessees. Assessees contested the Show Cause Notice on various grounds before the adjudicating authorities. In case of Oberoi Flight Services in Appeal No. 28/07, that the adjudicating authority did not accept the contention raised by the assessee and confirmed the demand along with interest and imposed consequent penalties. In respect of ITDC Welcome Group in Appeal No. 659/2007, the adjudicating authority held that the services rendered by the assessee would not fall under the category of "Airport services". Coming to such a conclusion, he dropped the proceedings. 3. Ld. Counsel on behalf of assessee in the case of M/s Oberoi Flight Services would submit that tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of management of an airport or civil enclave; (c) service can be provided to any person; and (d) service must be provided in an airport or civil enclave. 3.5 It is his further submission that vide Circular No. 80/10/2004-ST, dated 17-9-2004, the services which were liable to be taxed under the issue services were cargo and passenger handling such as security, transit facilities, landing charges, terminal navigation charges, parking and housing charges and route navigation facility charges. It is his submission that these services will be taxable under 'airport service' even when they are provided by other persons who are authorised by AAI. It is his submission that as per section 12 of AAI Act, the AAI have to discharge the functions indicated therein while establishing, maintenance of hotels, restaurants, are facilities which are not statutory functions but providing amenities. It is his submission that functions of the AAI may be broadly classified into two categories viz., services (or provision of amenities) and regulatory functions. In the case of regulatory functions, the AAI cannot be said to be rendering a service. AAI merely permits another pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er category of 'airport services'. It is his submission that as per the agreement AAI authorised the assessee companies to extend the lounge service facilities to various airlines. These lounge services have been provided by the person authorised by the AAI under the agreement. It is his submission that the Board's Circular dated 17-9-2004 would subsequently apply, as in this case, if AAI was providing such lounge facility to the passengers and charging the same from different airlines, services tax liability would get attracted. It is his submission that the assertion made the ld. Counsel that assessee was not authorised by the AAI could not be accepted as the services which are rendered by the assessees are actually services to be rendered by the AAI. It is his submission that the assessees in these appeals provide various services to the higher class passengers of the airlines which would have been provided by the AAI for the convenience of the passengers. It is his submission that the main task of the assessees is not to do the business of sale of food, beverages, drinks, snacks but render service to the exclusive class, for which assessee charges fixed price on the basis of nu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by adjudicating authority, falling under section 65(105)(zzm) under taxable service, "Any person of airport authorized or any person authorized by it in any airport or civic enclave" or otherwise. 9. On perusal of agreement entered by the assessee with the AAI which is enclosed in the Appeal of M/s Oberoi Flight Services case, it is seen that the said agreement, discusses about parting of a specified area to assessees for establishing a lounge on payment of specified amount as a licence fee, by the assessee to the AAI for a specific period. The said agreement also includes clauses to the effect that the AAI shall provide only bare area within the airport premises and assessees are required to organize for provision of lounge and other expenses for establishment of such lounges shall be incurred by the assessee who is treated as a licencee. It is also seen from the said agreement, the assessee shall use the premises for the purpose of supply and sale of snacks/drinks etc., for use of all passengers and bona fide visitors to the airport and officers of the authority. It is also seen from the agreement that from the entire terms of agreement, they are indicative of and agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X
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