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2016 (7) TMI 1077 - CESTAT NEW DELHI

2016 (7) TMI 1077 - CESTAT NEW DELHI - 2016 (45) S.T.R. 306 (Tri. - Del.) - Valuation - transport of passengers embarking in India for international journey by air service - service tax was paid only on the basic air fare and without including various charges - Extended period of limitation - Validity of show cause notice - Rule 5(1) of Service Tax (Determination of Value) Rules, 2006, was declared ultra vires by Delhi High Court in the case of Intercontinental Consultants & Technocrats Pvt. Ltd .....

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gross amount charged by the service provider for such service. Therefore, these charges clearly constitute part of the gross receipt for rendition of services. - Decided against the assessee. - Extended period of limitation - Held that:- , it is evident that appellant deliberately dilly dallied in providing the required information in spite of being asked repeatedly as a consequence of which the Revenue could eventually issue the show cause notice based upon whatever information was belatedl .....

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se there is no provision in the service tax law similar to Section 290 B of the Income Tax Act. - Held that:- the purpose of show cause notice (resulting in impugned order) has been fully and eminently served in this case and the impugned order has been issued in full and complete compliance of the principles of natural justice. In these circumstances, this contention is too flimsy to be of any consequence whatsoever. - Decided against the assessee. - Decided partly in favor of assessee. - S .....

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transport of passengers embarking in India for international journey by air service' only on the basic air fare and did not include the charges mentioned at Sl.No.(ii) to (xx) below: i. Total Basic Fare ii. Fuel Surcharge (YQ) iii. Insurance Surcharge (YQ) iv. Insurance & Fuel Surcharge (YQ) v. PSF (WO) vi. Passenger service facility charge (SW). vii. Passenger service charge (QX) viii. Passenger Solidarity Charge (IZ). ix. Custom Duty Fee (YC) x. International Transportation Tax (US). x .....

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₹ 6,20,48,923/- the correct total comes to only ₹ 6,16,52,181/as a result of which differential service tax in Col.9 of the said Annexure would be correspondingly reduced. b) There was no liability for paying service tax on the appellant as the show cause notice was issued to M/s Japan Airlines and not to the appellant, namely M/s Japan Airlines International Co. Ltd. and no demand can be confirmed without show cause notice. The Advocate cited the judgment of the High Court of Delhi .....

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the differential tax has been computed on the entire amount of column (2) namely, the gross fare. d) CBEC has clarified vide Instruction F.No.B.11/1/2002-TRU dated 1.8.2002 that taxes are not subject to service tax. e) The other charges at serial No.(xx) above are various kinds of taxes/passenger fee paid in different countries as was evident from the following charts submitted during personal hearing: Code No. Details of other Charges Details of Tax Country Name Authority name BP PSC, Departure .....

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Airport Holding Berhad SP Embarkation Fee Pakistan Airport Authority DA Passenger Service Charge (Domestic) Korea Re public of Korea International Airport Authority K Airline Passenger Levy Jamaica Ministry of Finance and Public Services SG Passenger Service Charge Singapore Civil Aviation Authority BE Passenger Service and Security Charge Belgium Brussels International Airport Com any WY Passenger Service Charge - Intl. Australia Paid to Airport Authority LK Embarkation Fee Sri Lanka Civil Avia .....

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uthority FI Passenger Fee (International) Finland Civil Aviation Administration RN Passenger Service Charge Netherlands Ministerie Van Verkeer waterstaat GB Air Passenger Duty (APD) United Kingdom HM Customs & Excise FR Airport Tax France Direction Generale del' Aviation Civile BW Departure Tax Botswana Department of Civil Aviation QX Passenger Service Charge - Intl France Paid to Airport Paris Group xw Airport Tax Poland Poland Airport Head Office CJ Security Service Charge Netherlands .....

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n GU Customs, Agriculture & Quarantine Inspection Service Charge Guam Continental Micronesia Inc. JC Passenger Service Charge (International) Viet Nam Civil Aviation Administration of Vietnam CA Air Travellers Security Charge Canada Canada Customs and Revenue Agency DY Tourism Arrival Tax Peru Airport Authority EY Airport Department Tax Fiji Airport Fiji Limited EZ Airport Security Charge Fiji Airports Fiji Limited LK Embarkation Fee Sri Lanka Civil Aviation Authority of Sri Lanka SS Excise .....

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.08.2007 that the Commissionerate had called a meeting of all the Airlines to disuse the issue relating to levy of service tax on Airlines and there was no willful, misstatement/suppression of facts on the appellant's part as it had submitted periodical returns and had clearly informed the Revenue Department that it was paying service tax only on the basic air fare. g) As the show cause notice has been issued in terms of the proviso to Section 73, in the absence of willful misstatement/suppr .....

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'transport of passengers embarking in India for international journey by air service' within 30 days from 1.5.2006 is incorrect as is evident from amended Registration Certificate copy placed at page 60 of the appeal paper book in terms of which this amendment was carried out on 26.5.2006. (i) Gujarat High Court in the case of Raval Trading Company vs. C.S.T. 2016 (42) STR 210 (Gu.)has held that penalty under Section 76 and 78 are mutually exclusive. (j) Fee and taxes are not includible .....

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he ST-3 return which it did not do and so allegation of suppression is sustainable. c) As held by CESTAT in the judgment reported in 1983 (14) ELT 1807, as the show cause notice mentioned the period, quantity of goods and rate of duty the show cause is valid. d) As per judgment of CESTAT in the case of British Airways Plc vs. C.S.T., New Delhi - 2013 (29) STR 177 (Tri-Del.) the service tax is payable on the entire amount of receipt for sale of tickets. e) CA certificate regarding nature of misce .....

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e appellant did not timely do so. Even when some figures were eventually supplied, it did not supply figures relating to tickets issued prior to 1.5.2006 for the journey performed after 1.5.2006 and the amount collected against cancellation charges during the period 1.5.06 to 31.3.08 although it promised that they would be supplied in due course. 4. We have considered the contentions of both sides. It is true that Annexure A to the show cause notice in column No.5 does state "value on which .....

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ross fare receipts (given in Col.2 of the said annexure). As stated in the impugned order, the appellant did not give any evidence regarding amount of money refunded against cancellation of tickets. In quasi-judicial proceedings, deduction can not be allowed in the absence of documentary evidence. Further, jurisprudentially speaking service tax has to be paid with reference to the money received against 'sale of tickets' and subsequent refund on account of cancellation may entitle the ap .....

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f column (7) comes to 6,16,52,181/- as against ₹ 6.20,48,923/- shown in the Annexure and this would equivalently and directly impact the differential amount of S.T. shown in column 9 of the Annexure. 5. The components on which demand of service tax has been confirmed are enumerated at serial Nos. (ii) to (xx) above. The appellant has given plausible explanation that the charges mentioned at Sl. No.(v) to (xx) in para 1 comprised only such amounts which were collected to be paid to various .....

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following cases: i) Continential Airlines Inc. vs. C.S.T., Delhi - 2015 - TIOL - 1481 CESTAT - DEL. (ii) Turkish Airlines vs. C.S.T., Delhi - 2013 (30) STR 367 (Tri-Dei.), (iii) Sri Lankan Airlines (iv) Luftansa German Airlines vs. C.S.T., Delhi - 2016 - TIOL - 1086 CESTAT - DEL. 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 case of Lufthansa German Airlines Vs. CST, New Delhi .....

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to be reimbursed to any agencies. Section 67 of Finance Act, 1994 provides that assessable value for charging service tax is the gross amount charged by the service provider for such service. Therefore, these charges clearly constitute part of the gross receipt for rendition of service$. Incidentally, it may be pertinent to mention that the Airlines collectively took up this issue with CBEC which vide letter No.341/52/2006-TRU dated 18.9.2007 addressed to Chairman Board of Airlines Representativ .....

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g. Please refer to your letter dated September 04, 2007, regarding inclusion of YQ and YR component in taxable value of service provided by aircraft operator to passenger embarking India for international journey [section 65(105)(zzzo) of the finance Act, 1994]. 2. As per section 67 of the finance Act, 1994, value of a taxable service shall be the gross amount charged by the service provider for the service provided and includes any amount received towards the taxable service before, during or a .....

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e meeting with the representatives of Board of Airline Representatives in India. 3. In view of into above, you are advised to take immediate necessary action to pay the appropriate service tax on above mentioned service provided. For any further clarification on this issue, you may like to contact the jurisdictional service Tax officers. Yours faithfully (K Balamurugan) OSD (TRU) Tel. 23092634" We may hasten to add that we are not basing our finding/conclusion on the basis of CBEC clarifica .....

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with the CBEC and it had also clearly informed the Revenue Department that it paid service tax on the basic fare only. Normally, in these circumstances, the allegation of suppression of facts/misstatement may not have been sustainable. However, in the present case, we find that when the Custom Department came to know that service tax was being paid only on basic fare, it wrote to the appellant repeatedly asking for the details regarding the gross amount collected. Paras 2, 3, 4, 4.1. & 4.2 o .....

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visions of Sec. 67 of the Finance Act, 1994 (the Act, in short) read with the Service Tax (Determination of Value) Rules, 2006. Accordingly, inquiries were made from the assessee in this regard vide letters dated 17.8.2006, 23.10.06, 9.4.2007 and 207.08 and they were asked to submit the details of break-up of the total value of tickets issued during the period 1.5.2006 to 31.3.2007 against such services provided along with the details of service tax paid. The details were sought separately for t .....

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.9.2007. Vide letter dated 9.10.07, the assessee informed that they were in process of preparing the data and would be submitting the same very soon. 4. However, neither reply from the assessee nor any data/details/information was received from the assessee. The assessee vide letter 17.1.08, was again requested to supply the details up to 30.9.07. They were further requested to expedite the details vide letters dated 20.2.08, 5.3.08 and 1.4.08. 4.1 On 1.4.08, Shri Ritesh Gupta, Assistant Manager .....

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the prescribed along with other details. 4.2 Finally, vide their letter dated 9.6.08, the assessee supplied the details for the year period May, 06 to September, 07 in the prescribed proforma. However, no details in respect of the tickets sold prior to 1.5.06 but used on or after 1.5.06 were supplied by the assessee and some discrepancies in the details submitted by the assessee were observed. Accordingly, the assessee was requested on 13.6.06 to supply the details nor supplied by them and to d .....

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d been supplied by the assessee". From the foregoing, it is evident that appellant deliberately dilly dallied in providing the required information in spite of being asked repeatedly as a consequence of which the Revenue could eventually issue the show cause notice based upon whatever information was belatedly provided by the appellant although it did not provide the entire information which was sought. The provision relating to willful misstatement/suppression of fact have been explained b .....

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ement. The onus is not on the assessee to prove its bona fides. In the case of CCE Vs. Chemphar Drugs Liniments [2002-TIOL-266-SC-CX], the Supreme Court held that something positive other than mere inaction or failure on the part of the assessee or conscious or deliberate withholding of information when assessee knew otherwise, is required before it is saddled with the liability the extended period. In the case of Continental Foundation Jt. Venture vs. CCE, Chandigarh-l [2007 (216) ELT 177 (SC)] .....

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tended period is rightly invocable in this case. As the extended period has been held to be invocable the judgment in the case of Infinity Infotech Parks Ltd. vs. UOI (supra) cited by Id. Advocate does not come to the appellant's rescue. 8. The appellant has strenuously contended that the show cause notice was issued to M/s Japan Airlines while the appellant is M/s Japan International Co. Ltd. and therefore, show cause notice was not issued to the appellant and hence no service tax can be de .....

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ly argued that no show cause notice was issued to it and the Delhi High Court judgment dated 8.2.2012 in the case of Jagat Novel Exhibitors Private Limited (supra) may have come to its rescue. However, in the present case we find that show cause notice was issue to "Japan Airlines, Chadralok Building, 36 , Janpath, New Delhi - 110001" and the appellant not only received the show cause notice but also responded thereto in full measure. It received all the communications in the name and .....

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