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Jet Airways (India) Ltd. Versus Commissioner of Service Tax, Mumbai-I

2016 (3) TMI 164 - CESTAT MUMBAI

Taxability - Tour Operator Services - Whether providing package tour service comes under the ambit of Tour Operator Services - Appellant providing Jet Escapes packages to the customers to increase their revenue by giving the facilities of transportation, stay and sight seeing as package tour - Held that: by relying on the decision taken by the Tribunal in the case of T.N. State Trans. Corpn., Kumbakonam Ltd. 2009 (2) TMI 90 - CESTAT CHENNAI, where the tour operator service means the person shoul .....

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d C.J. Mathew, Member (T) Shri J.H. Motwani, with Ms. Divya Jaswant, Advocates, for the Appellant. Shri S.R. Nair, E.O. (AR), for the Respondent. ORDER [Order per : M.V. Ravindran, Member (J)]. - This appeal is directed against order-in-appeal No. M-I/AV/102/2011, dated 18-2-2011. 2. Filtering out the unnecessary details, the facts of the case are appellant is engaged in operating airlines and also various other taxable services. During the period in question i.e. September, 2004 to January .....

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ppellant contested the show cause notice on merits as well as on limitation. The adjudicating authority after following due process of law, rejected the contentions raised and confirmed the demands with interest and also imposed penalties. On an appeal, the first appellate authority also rejected the contentions raised by the appellant before her and upheld the order-in-original in its totality. 3. Learned Counsel would take us through the entire case records and the agreement entered by th .....

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accordingly book the tickets. He would submit that in order to get cover under tour operator services the service provider has to plan, organize, schedule and arrange the tours. It is his submission that the entire Jet Escapes package was modelled to increase their revenue and in the form of sale of flight tickets to their customers. It is his submission that the passenger is given the facilities of transportation, stay and sight seeing as package tour. Appellant discharged the hotel bills, etc. .....

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e Bench. It is his submission that by that explanation, the activity undertaken by the appellant would not fall under the category of package tours. He would also submit that during the period in question, the appellant s records were audited by the department auditors and vide Audit Report dated 26-3-2009, the auditor had raised various other discrepancies in the records but never raised any objection as to the activity of the Jet Escapes package would fall under the category of tour operator s .....

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ed by the appellant. It is his submission that the appellant through their office or through its agents help their customers to plan and schedule their holiday to a specific destination and it would fall under the definition of tour operator services , which covers the activity of planning, scheduling, organizing or arranging tours. It is also his submission that the appellant s activity either directly or indirectly definitely includes planning, scheduling, organizing or arranging tour to their .....

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tour operator services and the current appellant s activities gets covered under the category of tour operator services . 5. We have considered the submissions made by both sides and perused the records. 6. The issue involved in this case is whether the activity undertaken by the appellant would get covered as taxable service provided under tour operator service . Undisputed fact is that appellant is offering Jet Escapes Package to their various passengers who visit their website for .....

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ranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport, and includes any person engaged in the business of operating tours in a tourist vehicle or a contract carriage by whatever name called, covered by a permit, other than a stage carriage permit, granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made thereunder; 6.1 It can be seen from the above reproduced definition that the said definition would .....

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Package details as downloaded from website, we find that the said advertisement specifically states that Return air travel in Economy class, inclusive of taxes, Airport transfers, Hotel accommodation with breakfast, sightseeing as applicable but does not indicate that they would plan, schedule or organize the tours for the passengers. Further the definition also mandates for the services to be rendered by persons engaged in business of operating tours in a tourist vehicle or a contract carriage. .....

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riage and stage carriage to various individuals/customers and it was considered as the said service would fall under the category of tour operator service . The Bench after considering the definition as was during the relevant period held as under :- 6.1 We have considered the rival submissions. Undisputedly the period involved in this case is from 1-4-2001 to 31-3-2008. The definitions of Tour Operators at the relevant period are reproduced hereunder for convenience of reference. (i) the p .....

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vehicles. We also find that the department could not bring out on record that the assessees are engaged in the business of planning, scheduling, organizing or arranging tours. In these circumstances, the assessees cannot be termed as tour operators. Therefore, the demands of Service Tax against them are not sustainable in law. As the demands are not sustainable, the penalties also do not survive. In these circumstances, the assessees appeals are allowed and the Revenue s appeals are dismissed. 6 .....

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ubmissions. The impugned demand was issued in the wake of amendment to the scope of the levy under the category tour operator vide Finance Act, 2004. Prior to the amendment introduced in the Finance Act, 2004, the levy covered tours operated using tourist vehicles as defined in Section 2(43) of the Motor Vehicles Act and the rules made thereunder. This position was clarified by the Hon ble High Court of Madras in the case of Secretary, Federation of Bus Operators Association of Tamil Nadu v. UOI .....

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nt modes of transport : At present, tour operator service covers package tour operators also. However, under the present definition, such package tours attract service tax only if such tours involve modes of transport other than road (say a combination of air-rail-cab travel). The definition of tour operator has been suitably expanded. While the existing levy on tour operators engaged in operating tours in tourist vehicles remains as such, in case of a package tour (which are planned, scheduled, .....

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