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M/s. United Airlines Versus C.S.T., Delhi

2016 (7) TMI 995 - CESTAT NEW DELHI

Demand of service tax on passenger service fee and airport taxes - extended period of limitation - Held that:- mere non-payment of duties is not equivalent to collusion or wilful mis-statement or suppression of facts, otherwise there would be no situation for which ordinary limitation period would apply. Inadvertent non-payment is to be met within the normal limitation period and the burden is on Revenue to prove allegation of wilful mis-statement. - the ingredients required for imposing penalty .....

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iginal dated 17.09.2009 in terms of which service tax demand of ₹ 48,30,131/- (along with interest and penalties) was confirmed on the ground that the appellant provided transportation of passengers by air service but did not pay service tax on the full value thereof in-as-much-as no service tax was paid on the amount of fuel and insurance surcharge as well as on passenger service fee and airport tax. 2. Ld. advocate for the appellant contended that the appellant has not contested the dema .....

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s. CST, New Delhi [2016-TIOL-1086-CESTAT-DEL] and Continental Airlines Inc. Vs. CST, Delhi [2015-TIOL-1481-CESTAT-DEL]. He also submits that there was no wilful mis-statement or suppression of facts as the airline had taken up the issue through airlines association and it was only on 18.09.2012 that the issue of fuel and insurance surcharge was clarified by CBEC and thereafter the service tax relating to thereto was remitted by it. 3. Ld. Departmental Representative on the other hand argued that .....

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fee and airport taxes was the subject matter of several judgements of CESTAT including Lufthansa German Airlines Vs. CST, New Delhi (supra) and Continental Airlines Inc. Vs. CST, Delhi (supra) wherein it has been held that no service tax is payable on these charges because these charges are not includible in the assessable value. Indeed CESTAT judgement in the case of British Airways PLC Vs. CST, New Delhi (supra) cited by Revenue was taken note of and distinguished by CESTAT judgement in the c .....

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ted 341/S2/2006-TRU, dated 18.09.2007 addressed to the Chairman, Board of Airline Representatives in India stated as under:- To Shri P.K.Gupta Chairman, Board of Airline Representatives in India C/o AirIndia, Air India Building 13th Floor, Nariman Point Mumbai-400 021 Subject:- Service tax on transport of passengers embarking in India for international journey by air service - Regarding. Please refer to your letter dated September 04, 2007, regarding inclusion of YQ and YR component in taxable v .....

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in Service Tax (Determination of Value) Rules, 2006 to clear and unambiguous. As explained by you, YQ and YR charges are integral part of the consideration received for the services provided. Method of vivisecting may not be of any relevance as long as the amount is in the nature of the consideration paid for the service provided. The legal status has been explained in person during the meeting with the representatives of Board of Airline Representatives in India. 3. In view of into above, you a .....

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ly untenable to even allege suppression/ wilful mis-statement with regard to service tax demand pertaining to fuel and insurance surcharge. We have perused the Show Cause Notice also and find that the allegation of wilful suppression of taxable value has been made essentially on the ground that the appellant did not include the fuel and insurance surcharge, PSF and airport taxes in the assessable value and failed to file correct ST-3 returns (meaning that the assessable value shown in the ST-3 r .....

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