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Commissioner of Central Excise, Goa Versus M/s Zuari Travel Corporation

2013 (7) TMI 911 - CESTAT MUMBAI

Classification of services - whether the sub-agent of an IATA Agent, who books the tickets of Air for customers and gets commission from IATA Agent, is rendering services under the category of ‘Business Auxiliary Services’ or under the category of ‘Air Travel Agent’? - Appeal No. ST/309/06 - Dated:- 18-7-2013 - SHRI P.R. CHANDRASEKHARAN AND SHRI ANIL CHOUDHARY, JJ. Shri P.N. Das, Commissioner (AR) for the Appellant Ms. Padmavati Patil, Advocate for the Respondent JUDGEMENT Per: P.R. Chandrasekha .....

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ssioner came to the conclusion that the sub-agent is rendering the service classifiable under Air Travel Agent Services and not under Business Auxiliary Services . Accordingly, he set aside the order of the adjudicating authority dated 17.2.2006, wherein the classification was done under Business Auxiliary Services . Aggrieved of the said decision, the Revenue is in appeal before us. 3. The learned Commissioner (AR) appearing for the Revenue submits that sub-agent books the ticket and gets the c .....

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ecisions of the Tribunal in the case of Sew Construction Ltd. Vs. Commissioner of Central Excise, Raipur - 2011 (22) STR 666 (Tri-Del), Vijay Sharma & Co. Vs. Commissioner of Central Excise, Chandigarh - 2010 (20) STR 309 (Tri-LB) and Indfos Industries Ltd. Vs. Commissioner of Central Excise, Noida - 2012 (26) STR 129 (Tri-Del). Accordingly, he pleads for allowing the Revenue s appeal. 4. The learned Counsel appearing for the respondent M/s Zuari Travel Corporation, on the other hand, submit .....

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ect of the services rendered by Airlines Agents/IATA Agents, the services is rendered to the customers and not to the Airlines. In the present case also, the same logic would apply and, therefore, the services rendered by the sub-agent are to the customers and, therefore, the same would merits classification under Air Travel Agent Services  as defined in law. Therefore, the impugned order is correct in law and sustainable. Accordingly, it is pleaded that the Revenues appeal has no merits and s .....

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t any person engaged in providing any service in relation to the booking of passage for travel by air, is an Air Travel Agent, whether recognized by IATA or not. Therefore, in the present case, the respondent comes clearly within the definition of Air Travel Agent as defined in law, as the services rendered by him consequently under Section 65(105)(l). 5.2 As regards the Business Auxiliary Services , the same is defined under Section 65(19) of the Finance Act, 1994, which reads as under: - Busin .....

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a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheques, payments, maintenance of accounts and remittance, inventory management, evaluation or development of prospective customer or vendor, public relation services, management or supervision, and includes services as a commission agent, but does not include any information technology service and any activity that amounts to manufacture within the meaning .....

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i) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goods or services; or (iv) undertakes any activities relating to such sale or purchase of such goods or services; (b) information technology service means any service in relation to designing, developing or maintaining of computer software, or computerized data processing or system networking, or any other service primarily in relation to operation of computer systems. The taxable .....

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made in Buxa Dooars Tea Co. Ltd. case, cited supra, and more particularly those in paragraph 11 thereof cannot be read out of context. The situation regarding the levy and the measure of the tax was entirely different. It was found as a fact that the measure of the tax had no nexus with levy therein. In our case, however, such is not the position. We have already shown that the measure of the tax provided by Section 67(k) cannot be said to be totally connected with the services offered by the a .....

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on 67(k) which provides the measure of the tax is not unconnected with the main levy of the tax for the reasons that we have already given above. 17. We have already shown here that the provision of Section 67(k) does not in any manner alter the nature of tax and does not shift it from the service rendered to the customer to the service rendered to the airlines. The contention, therefore, is clearly incorrect on facts. 18. The further argument that the notification dated 26-6-1997 restricts th .....

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at there is anything repugnant in that provisions and the definition clause as also Section 67(k) which is a charging provision. 5.4 In our considered view, the question before us is also identical. The activity undertaken by respondent herein, who is a sub-agent of the IATA agent comes under Air Travel Agents Services or Business Auxiliary Services . The ratio of the decision of the Hon'ble High Court of Madras in the case of Airlines Agents Association (supra) would squarely apply to the f .....

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