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M/s Cox & Kings Ltd., Versus Commissioner of Service Tax, Mumbai

Tour Operator Service - business of organizing outbound tours - case of appellant is that the service tax is destination based consumption tax and should be levied at the location where the services are consumed or in other words where the services are used - case of Revenue is that the services of “Tour Operator” was placed in Rule 3(1) (ii) of Export of Service Rules, 2005. As such, till the time the tour operator is located within India service would be deemed who have been provided within In .....

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ate with Shri S.S. Gupta C.A. And Shri Vinay Jain, C.A., for appellant Shri Roopam Kapoor, Commr (AR), for respondent Per: Raju The Appellant Cox & Kings Ltd., are engaged in the business of organizing outbound tours. Two notices were issued to the appellants seeking demand of service tax on the activity of outbound tours. The appellants have described their activity as determining the probable dates and venues of tours, finalising the itinerary; booking of accommodation in hotels in foreign .....

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nder Section 76 only in the 2nd case. The demand of interest was also confirmed in both the cases. Aggrieved by the said order, the appellants are before the Tribunal. 3. Learned Counsel for the appellants argued that the service tax is destination based consumption tax and should be levied at the location where the services are consumed or in other words where the services are used. Learned Counsel relied on the decision of the Hon ble Apex Court in the case of All India Federation of Tax Pract .....

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India they had to be considered as export of service. Learned Counsel argued that planning, scheduling, organizing or arranging are incidental to conducting of tour. Learned Counsel relied on the CBEC Circular No.36/4/2001 dated 08.10.2001 wherein the following has been clarified:- I am directed to say that question has arisen whether services provided outside the limits of the Indian territorial waters are liable to Service Tax or not. The matter has been examined. At present the levy of servic .....

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nd in case of the Customs by Notification Nos.11/87 Cus. Dated 14-1-1987, & 64/97. Cus., dated 1-12-1997). It is, therefore, clarified that the services provided beyond the territorial waters of India are not liable to Service Tax as provisions of Service Tax have not been extended to such areas so far. 3.1 Learned Counsel further relied on Circular No.B.43/10/97-TRU dated 22.08.1997 wherein the following has been clarified:- 2.6 Service tax on services rendered by tour operators is only on .....

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d that the changes made with effect from 10.09.2004 have no impact. He pointed out that the definition as given in section 65 (115) of the Finance Act w.e.f. 01/04/2000 up to 09/09/2004 read as follows: - Tour operator means any person engaged in the business of operating tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 (59 of 1988) or the rules made there under. The definition as given in section 65 (115) of the Finance Act w.e.f. of Tour Operator w.e.f. .....

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ber 2004, the words planning, scheduling, organizing or arranging the tours by any mode of transport have been incorporated in the definition. Prior to this, the definition did not specifically contain the terms planning, scheduling and organizing and the tour services were taxable only when the tour was undertaken in a tourist vehicle. The appellant submits that no tour can be conducted without planning, scheduling and organizing. Every tour operator has to perform the following basic functions .....

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r, the mode of traveling, nature of hotel accommodation, free time for shopping etc. This enables him to decide on the amount to be charged to each tourist. (iv) Normally the tour operator thereafter advertises about the tour or prints the Brochure giving the details of the tour like place to be visited, duration of the tour, names of the hotel, amount etc. (v) The amount by the prospective customer is required to be paid in advance which enables the tour operator to pay advance to the owner of .....

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rged by the tour operator normally includes the cost of hotel, accommodation, sight scene, breakfast, lunch and dinner, entry fees for various tourist spots, traveling costs. Thus, it is submitted that the taxable activities carried out by a tour operator even prior to 10th September 2004, included the planning, scheduling and organizing activities for conducting the tour. It is submitted that without these activities it is not possible to conduct a tour at all. Therefore, it is submitted that w .....

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ices Rules, 2005 that the tour operators are classifiable under Rule 3(ii). In the said category in order to consider the said service of export if such service is performed outside India. Thus the learned Counsel argued that the performance of the service outside India is a mandatory condition for considering the service of tour operator as export of service. The learned Counsel relied on the Board s Circular No. III/05/2009-ST dated 24.02.2009 which reads as follows:- 2. The matter has been ex .....

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ed (or even partly performed) outside India (iii) - 3. Similarly, if an Indian event manager (a Category II service [Rule 3(1)(ii)]) arranges a seminar for an Indian company in U.K. the service has to be treated to have been used outside India because the place of performance is U.K. even though the benefit of such a seminar may flow back to the employees serving the company in India. 3.6 Learned Counsel is also relies on the Circular No.117/11/2009 dated 31.10.09 issued in the context of outbou .....

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he service in respect of tour operator is export if such service is performed outside India. It is also provided therein that where such taxable service is partly performed outside India, it shall be treated as performed outside India. Therefore, it is clarified that service tax is not chargeable on the services provided in respect of tour undertaken for carrying out Haj and Umrah Pilgrimage in Saudi Arabia by Indian pilgrims considering these as export of service, provided they fulfill the othe .....

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l establishment in India. 17.06.05 to 18.04.06 The Export of Service Rules 2005 were amended by notification no.28/2005-ST dated 07.06.05. The said notification introduced the condition of receipt of consideration in foreign currency even for rule 3(2). As tour operator service is covered under rule 3(2), the said condition was applicable during the period 17.06.05 to 18.04.06. 19.04.06 to 28.02.07 The Export of Service Rules 2005 were further amended by notification no.13/2006-ST dated 19.04.06 .....

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further argued that service tax has been paid on the airfare portion of the Outbound Tours and therefore the demand if confirmed is required to be reduced to that extent. 3.9 Learned Counsel further raised the issue of jurisdiction. Learned Counsel argued that their branches have been located at 13 different places and each one is registered with the respective jurisdictional Central Excise Commissionerate. They obtained the centralized registration only on 17th November 2009. Learned Counsel a .....

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the Court. It was argued that the issues on which the order was passed by the Delhi Bench of the Tribunal had never been agitated before the Commissioner or before the Bench in appeal. His further argument was that the Revenue had not accepted the order of the Tribunal however the appeal of the Revenue was dismissed solely on the ground of delay and not on merits. He relied on the decision in the case of Fuljit Kaur v. State of Punjab - 2010 (262) ELT 40 (S.C.) wherein it has been held that dis .....

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icata and is not a binding precedent. He further argued that certain decisions were not brought to the notice of the Tribunal when the matter was heard before the Bench in Delhi. He relied on the decision of the Apex Court in the case of UOI v. Paras Laminates - 1990 (49) ELT 322 (SC). To assert that it is open to the Tribunal to refer the matter to Larger Bench when there is a reason to doubt the correctness of the earlier decision. 4.1 He argued that the decision of the Tribunal in the appella .....

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there was no need of the specific component of the definition. In the said decision it has been held in the absence of word operating in the generic fact of the definition applied in the tour operators. It was argued that the Tribunal has wrongly held that the specific component of the definition would have been surplusage in legislative drafting if the generic facet of the definition was considered to include operating tours. He argued that this specific component of the definition from 01.04. .....

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is clear and manifest and without doubt, that construction ought to prevail unless there are some strong and obvious reasons to the contrary. He pointed out that in the same judgement it has been held that the word includes is inclusive and expands the meaning. 4.3 He further argued that in the case of Oswal Agro Mills - 1993 (66) ELT 37 (SC) the Hon ble Apex Court held that the interpretation of statute is an attempt to discover the intention of the legislature from the language used by it, ke .....

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providing package tours. The said notification clearly defines package tour as a tour in which the provisions for transportation and accommodation for stay of the person undertaking the tour has been afforded by the tour operator . He argued that the intent of the Government is thus clear from the said notification. He argued that in the case of Johnson & Johnson Ltd. - 1997 (92) ELT 23 (SC) the Hon ble Supreme Court held that interpreting an earlier notification when the question is whethe .....

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he Hon ble Supreme Court due to the fact that the decision of the Tribunal in the appellant s own case per incuriam. 4.5 Learned A.R. further argued that the services provided by tour operator is not covered territorially. Learned A.R. argued that the decision of the Hon ble Apex Court in the case of Bengal Immunity Company Ltd. vs. State of Bihar and Ors. was not brought to the notice of the Tribunal. He argued that the Hon ble Apex Court in the said case has observed that the situs of an intan .....

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rovided by a tour operator would be deemed to have been provided in India unless the conditions of the said rules are satisfied. 4.6 Learned A.R. further relied on the fact that the services of Tour Operator was placed in Rule 3(1) (ii) of Export of Service Rules, 2005. As such, till the time the tour operator is located within India service would be deemed who have been provided within India. He argued that the said rule was approved by the Parliament, it is law of the land in view of the decis .....

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gone through the rival submissions. The primary defense of the appellant is that identical issue has been decided by the Tribunal in their own case reported in 2014 (35) STR 817 (Tri. - Del) (hereinafter referred as the said order). 5.1 The said order holds as follows 21. Summary of our conclusions : (a) Tour operator qua Section 65(115) of the Act defines the expression in terms of two facets. The business of planning, scheduling, organizing or arranging tours by any mode of transport (includi .....

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of the definition. Within the scope of first facet of the definition, the activity of operating of the tour is excluded; (b) As a consequence of the interpretation of tour operator vide (a), where a person pursues a composite activity of operating tours and the planning, scheduling, organizing or arranging of such tours, by a mode of transport other than by a tourist vehicle (covered by a permit issued under the provisions of the Motor Vehicles Act, 1988 or the Rules made thereunder), such activ .....

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iding a destination and consumption based taxable service but does not authorize levy and collection of tax, for a service provided and consumed beyond the Indian territory; and (d) Without prejudice to the conclusions summarized in (a) to (c) supra, we hold : (i) Planning and scheduling of outbound tours may not be components of services provided to tourists, would amount to an incidental activity undertaken as a prelude to providing tours and thus the service if at all provided is to the servi .....

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Export of Service Rules, 2005 is not decided and is left open, as not necessary in view of our ruling on other issues? (iii) The assessees would be entitled to abatement benefits in terms of any exemption/abatement benefits provided qua Notifications issued by the Central Government under Section 93(1) of the Act, but subject to fulfilment of the conditions enjoined in such Notifications; (iv) Invocation of the extended period of limitation, for assessment and levy of Service Tax, interest and .....

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We find that the Apex Court has dismissed the Revenue s appeal solely on the ground of delay. In the case of RUBBER PRODUCTS LTD 2015 (326) E.L.T. 232 (S.C.), Hon ble Apex Court has observed as under The High Court has glossed over the vital fact that the order of Collector (Appeals) in the first round of litigation was not accepted by the Department but was challenged. This plea did not fail on merit but appeal was dismissed by the Tribunal as time barred. Therefore, at the most, the said orde .....

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) If the service is provided and consumed within the territory of India or otherwise The two issues are discussed in detail in para 6 and 7 below. 6 In this para we examine the reasoning given in the said order of the Tribunal on the issue of the definition of the term tour operator and the taxable service. The issues before the Tribunal in the aforesaid case have been elaborated in para 16 of the said order, which reads as follows:- 16. In view of the core dispute between the parties, the follo .....

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s defined under Section 65(115) of the Act post amendment of the definition of the Finance Act, 2004 with effect from 10.09.2004 has been examined. This issue has been examined in sub-para (c) of para 17 of the said order which reads as follows:- (c) W.e.f. 10-9-2004 tour operator was amended again. We are concerned with the scope of the expression, post-10-9-2004. As amended, a person engaged in the business of planning, scheduling, organising or arranging tours (which may include arrangement f .....

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s of planning, scheduling, organising or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by any mode of transport; and (ii) the specific component, brought into the definition by the inclusionary clause. Under the inclusionary fold a person engaged in the business of operating tours in a tourist vehicles, covered by a permit granted under the Motor Vehicles Act, 1988 or the rules made thereunder would also be a tour operator . On a true a .....

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s not however include the business of operating tours, by any mode (i.e. all modes), of transport. Contours of the expression (in the generic facet) are clearly limited to the business of planning, scheduling, organising or arranging, etc., but exclude operation of tours. We infer this to be the only permissible meaning of the amended definition, since if the generic facet of the definition includes operating tours as well, there was no necessity for the second and specific facet spelt out in th .....

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the defined service as well. Operating tours by any mode of transport would have clearly covered operating tours in a tourist vehicle covered by a permit granted under the 1988 Act or the rules made thereunder; and the later inclusionary clause would amount to a surplusage. We are compelled to the above interpretation of the amended definition since it is an established principle of statutory interpretation that attribution of surplusage in legislative drafting, must clearly be avoided. Patanja .....

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which would render a part of the statute devoid of any meaning or application. In J.K. Cotton Spinning & Weaving Mills Co. Ltd. v. State of U.P. - AIR 1961 SC 1170 Das Gupta J. observed that: In the interpretation of a statute, the Court always presumes that the Legislature inserted every part thereof for a purpose and the legislative intention is that every part of the statute should have effect. The Privy Council in Quebec Railway, Light, Heat & Power Co. v. Vandry - AIR 1920 PC 181, 1 .....

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: When the Legislature enacts a particular phrase in a statute, the presumption is that it is saying something which has not been said immediately before. The rule that a meaning should, if possible, be given to every word in the statute implies that, unless there is good reason to the contrary, the words add something which would not be there if the words were left out. The above decision of the House of Lords was quoted with approval and referred to in Umed v. Raj Singh - AIR 1975 SC 43. The .....

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by any mode of transport (including arrangements for accommodation, sightseeing, or other similar services) including where the tour is by a tourist vehicle covered by provisions of the 1988 Act or the rules made thereunder, is one facet of the definition; and the operating of tours in a tourist vehicle covered by a permit granted under the provisions of the 1988 Act or the rules made thereunder is another and a distinct facet, of the definition. In the first facet of the definition, the activit .....

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ity of planning, scheduling, organising or arranging tours including operating the tour in a tourist vehicle covered by a permit granted under the 1988 Act or the rules made thereunder, falls within the ambit of tour operator , as a consequence of the second inclusionary clause. 6.2 Thus it has been held in the said order that the term Tour Operator does not include the persons operating tours on any mode other that specific motor vehicles operated by operators having permit under Motor Vehicle .....

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ty of planning, scheduling, organising or arranging tours. iii) The generic facet of the term tour operator only expands the scope of specific facet (inclusive part of definition) to cover in it s ambit the people involved in the activity of planning, scheduling, organising or arranging tours operated in any mode of transport but not Operating tours. iv) Since the term Tour Operator does not cover in its ambit the service of operating tours in any mode of transport other than specified motor veh .....

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ng paragraphs. 6.3 The term tour operator defines only the person providing the service and not the taxable service. The tribunal in the said decision has examined the term Tour Operator and arrived at the conclusion that the service provided by appellant is not a taxable service . In our considered view the term Tour Operator does not define the taxable service . The taxable service is defined as Any service provided (or to be provided) to any person, by a tour operator in relation to a tour. I .....

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of the term tour operator , is reproduced below On a true and fair construction of the amended definition, the amendment expands the scope of the expression to include in the taxable service, engagement in the business of planning, scheduling, organising or arranging tours (which may include arrangements for accommodation, sightseeing or similar services) by any mode of transport (not limited to tours in a tourist vehicle covered by a permit granted under the Motor Vehicles Act, 1988 or the rul .....

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service has to be construed accordingly. The only conclusion that needs to be made on the basis of the definition of the term Tour Operator is if the appellant falls within the definition of term Tour Operator or not. 6.4 As discussed in para above, the said order acknowledges that the appellant has at least provided the service of organising and arranging the tours. In such circumstances they clearly fall under the category of Tour Operator . In our considered view the taxable service is not l .....

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he service provided by him does not become non taxable. In fact, so long as the appellant is engaging in any one or more of the activities of planning, scheduling, organising or arranging tours, any service provided by him in relation to tour, including operating tours would fall in the definition of the taxable service. Admittedly the appellants are engaged in the activity of planning, scheduling, organising or arranging tours. 6.5 The said order does not define as to what does the term operate .....

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business (c) one that performs surgical operations (d) one that deals in stocks or commodities (2) (a) mountebank, fraud (b) a shrewd and skillful person who knows how to circumvent restrictions or difficulties (3) (a) something and especially a symbol that denotes or performs a mathematical or logical operation (b) a mathematical function (4) a binding site in a DNA chain at which a genetic repressor binds to inhibit the initiation of transcription of messenger RNA by one or more nearby struct .....

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rom these definitions of the word Operator , the definition of term Tour operator appearing in the Finance Act 94, would mean a person doing a business of tours. An Operator is a person who operates a business. Operating business of tour could involve any one or more of the activities like planning, scheduling, organizing or arranging tours (which may include arrangement for accommodation, sightseeing or other similar services). Thus any person involved in any one or more of the activities of th .....

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efits of tourists and have received consideration for this service provided; and this is the substantive purpose and basis of the service. We reject this contention. On the other hand the said order holds that the appellant have not provided the service of planning and scheduling. In para 21 (d) (i) it observes as follows Planning and scheduling of outbound tours may not be components of services provided to tourists, would amount to an incidental activity undertaken as a prelude to providing to .....

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interpretation is consistent with the arguments in para above. Thus the said order appears to be contradictory in itself. 6.7 Meaning of the word operator with reference to the Motor Vehicle Act, 1988 and rules thereunder. Now we examine the term operator in reference to the context namely, Motor Vehicle Act, 1988, in which the term operating has been used in the definition of tour operator. The permit for operating tours is granted under the Motor Vehicles (All India Permit for Tourist Transpor .....

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l provides all tickets for travel by air, rail, ship, passport, visa and also arrange accommodation, tours, entertainment and other tourism related services; or (c) the tour operator (Company or individual who provides for transport, accommodation, sight-seeing, entertainment and other tourist related, services for tourist, and who possesses his own vehicle or has taken a vehicle on lease for this purpose for a period of at least one year and is recognised by the Department of Tourist of the Gov .....

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services for tourist). It is obvious that the term operator applies to persons engaged in any of these activities. It is not necessary that a person should be providing all the services to become an operator . By just providing one or more of these services a person can become an operator . In fact the list is not exhaustive and includes in its ambit other tourist related services . Use of expression other tourist related services in the definition means that it is not necessary to provide all t .....

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more of the wide range of activities. 6.7.1 It can be seen that it defines the operator in specific terms and it includes a person who is engaged in engaged in a business of promotion of tourism by simply providing tourist transport vehicles on tourist circuits. Apparently the definition of the tour operator under Motor Vehicle Act, 1988, is very wide and also includes in its ambit all persons providing tourist vehicles on tourist circuit. It can be seen that in this definition it is not necessa .....

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ansport Operator . 6.7.2 One may argue that the term Tourist Transport Operator also defines a tour operator in clause (c) thereof. It can be seen that the said definition has a necessary ingredient of ownership or lease of the vehicle. That is not so in the instant case. 6.8 The activity of appellant described as operating tours is not different from planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) by a .....

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nclude arrangements for accommodation, sightseeing or other similar services) by any mode of transport and which leads to the said conclusion that they are operating tours . The said order describes the business of conducting and operating package tours as follows:- (ii) the business of conducting and operating package tours outside India involve several steps such as determining the probable dates and venues of tours, finalising the itinerary; booking of accommodation in hotels in foreign count .....

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al steps such as determining the probable dates and venues of tours, finalising the itinerary; booking of accommodation in hotels in foreign countries; planning and booking for travelling through bus, railways, travelling cruise liners, etc., in foreign locations, sightseeing on tours, breakfast/meals; providing service of foreign guides, providing a tour leader to accompany the touring party; Air ticketing, arranging visa and travel insurance to guests as required for foreign travel, complement .....

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tor determining the probable dates and venues of tours, finalising the itinerary; planning, scheduling/in relation to tour Specifically included as the appellants plan and schedule the dates and itinerary booking of accommodation in hotels in foreign countries; organising or arranging/in relation to tour Specifically included as the appellants organise and arrange hotels planning and booking for travelling through bus, railways, travelling cruise liners, etc., in foreign locations, organising or .....

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ign guides, providing a tour leader to accompany the touring party organising or arranging/in relation to tour Specifically included as the appellants organise and arrange the tour guides to guide the tourists Air ticketing, arranging visa and travel insurance to guests as required for foreign travel, organising or arranging/in relation to tour Specifically included Specifically included as the appellants organise and arrange the tickets and visa s. From the above analysis it is apparent that th .....

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rranging tours each individually amounts to Operating tours The interpretation of words Operating vis a vis planning, scheduling, organising or arranging tours , is not relevant for determining the scope of the taxable service, but it is relevant only for determination of the meaning of the words Tour Operator . While it is not relevant in interpreting the scope of the taxable service , the said order proceeds on the assumption that the appellants are providing the service of operating tour whic .....

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operator determining the probable dates and venues of tours, finalising the itinerary; planning, scheduling/in relation to tour Specifically included as the appellants plan and schedule the dates and itinerary booking of accommodation in hotels in foreign countries; organising or arranging/in relation to tour Specifically included as the appellants organise and arrange hotels planning and booking for travelling through bus, railways, travelling cruise liners, etc., in foreign locations, organis .....

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f foreign guides, providing a tour leader to accompany the touring party organising or arranging/in relation to tour Specifically included as the appellants organise and arrange the tour guides to guide the tourists Air ticketing, arranging visa and travel insurance to guests as required for foreign travel, organising or arranging/in relation to tour Specifically included Specifically included as the appellants organise and arrange the tickets and visa s. In our considered view all the activitie .....

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ellant is considered to be operating tours then the activity of operating is synonymous with the activity of planning, scheduling, organising or arranging tours . 6.10 Each of the activities of the appellant individually qualify them under the category of Tour Operator . In our considered view even if the it is considered that the there is some difference between the term Operating tours and planning, scheduling, organising or arranging tours , still it is not disputed that the appellants are in .....

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re involved in any one or more of these activities of planning, scheduling, organising or arranging tours they remain within the definition of tour operator . Therefore in terms of the definition of Taxable Service, ANY SERRVICE provided by them in relation to tour, including the so called service of OPERATING TOURS , would be covered by the definition of Taxable Service. This aspect was apparently not brought to the notice of the bench when the matter was argued, and therefore lost sight of in .....

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is an attempt to discover the intention of the legislature from the language used by it, keeping always in mind, that the language is at best an imperfect instrument for the expression of actual human thoughts. It is also idle to expect that the draftsman drafted it with divine prescience and perfect and unequivocal clarity. Therefore, court would endeavour to eschew literal construction if it produces manifest absurdity or unjust result. In Manmohan Das V. Vishnu Das [AIR 1967 SC 643] a Constit .....

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other than tourist vehicle, is not correct and proper interpretation of the term tour operator . Especially when the term operating has not been defined while doing so. Moreover the proposition that individual activities of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services) can individually make a person tour operator , but the activity of operating tour which may consist of one or more of these activities .....

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covered by a permit granted under the Motor Vehicles Act, 1988 or the rules made thereunder, (amendments are emphasised). (iv) 16-5-2008 to 30-6-2012 : Tour Operator means any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, site-seeing, 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 whateve .....

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93, issued under the Motor Vehicles Act 1988. The definition of Tourist Transport Operator as provided therein is as follows:- 2[(g) Tourist Transport Operator means- (a) A company or an individual engaged in a business of promotion of tourism by providing tourist transport vehicles on tourist circuits; or (b) any travel agency (who possesses his own vehicle or have taken a vehicle on lease for this purpose for a period of at least one year) run by a company or an individual provides all tickets .....

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includes in its ambit a person merely providing tourist transport vehicles on tourist circuits. It is obvious that such a person is simply providing tourist vehicles on certain routes and is not engaged in the activity of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sightseeing or other similar services). From the rules it can be seen that the permit is granted to the person and not to a vehicle. Thus a person becomes an operator by virtu .....

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f such tours (including arrangements for accommodation, sightseeing or other similar services), by a mode of transport other than a tourist vehicle, such activity falls outside the scope of tour operator . However, the activity of planning, scheduling, organising or arranging tours including operating the tour in a tourist vehicle covered by a permit granted under the 1988 Act or the rules made thereunder, falls within the ambit of tour operator , as a consequence of the second inclusionary clau .....

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son providing tourist transport vehicles on tourist circuits who would otherwise be not covered by the generic definition. 7. The second main issue decided by the tribunal in the said order is if the service has been provided in India or outside the territory of India. In the aforesaid case, it has observed that The consideration received for operating and arranging outbound tours (provided by the appellants and consumed by tourists beyond the territory of India) is not liable to levy and collec .....

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der) The consideration received for operating and arranging outbound tours (provided by the appellants and consumed by tourists beyond the territory of India) is not liable to levy and collection of Service Tax under the provisions of the Act, since the taxable event is the provision of a taxable service; and not the pursuit of the profession, of a taxable service providers. A perusal of the para 18 (a) to (m) of the said order shows that the said assumption has been made without analysing the a .....

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nning, scheduling, organizing or arranging tours to the clients. He does not undertake the actual tour on behalf of the clients. Only the activity of planning, scheduling, organizing or arranging tours on behalf of the clients is done by the appellant. The client could do planning, scheduling, organizing or arranging tour himself. He could have done the airline and hotel bookings. He could have booked the meals and tour guide online. He could have booked the local travel abroad himself. He could .....

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dia. Thus provision of services of services of planning, scheduling, organizing or arranging tours is done by the appellant in India, before the client leaves the shores of India. Following is the analysis of the services provided by the appellant. Service received by client Where provided Where consumed Determination of the probable dates and venues of tours, finalising the itinerary; The entire scheduling and finalising of itinerary is conducted by the appellants in India It relieves the clien .....

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and booking for travelling through bus, railways, travelling cruise liners, etc., in foreign locations, Booking activity is undertaken sitting in India. It relieves the client of the burden of booking of travel arrangements in foreign countries. It is received and consumed before the tour starts when the client is still in India. Consumed in India The sightseeing is booked with local guides abroad or appellants own guides on tours, In case of local guides abroad the services provided is only of .....

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sumed in India. In case the meals Specifically included as similar services in relation to tour and as the appellants organise and arrange food in hotels and restaurants abroad providing service of foreign guides, providing a tour leader to accompany the touring party organising or arranging/in relation to tour Specifically included as the appellants organise and arrange the tour guides to guide the tourists Air ticketing, arranging visa and travel insurance to guests as required for foreign tra .....

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ded and consumed within India much before the client leaves the shores of India and is not done outside the territory of India. 8. It is seen that the previous decision of the tribunal in the appellants own case shortlists the issues to be decided in the para 16 thereof in following terms: - 16. In view of the core dispute between the parties, the following are the substantive issues that fall for determination : Issues : a (i) What is the scope of the expression tour operator defined in Section .....

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The said decision fails to consider/ignores the definition of the Taxable Service enumerated in Section 65(105)(h) in the reasoning given in the said decision. It is seen that the discussion in the said decision (Para 16 onwards) does not deal with the said definition. 8.1 The said decision presumes that the appellants are Operating tours. The said decision does not define the meaning of the term Operator . It presumes that the appellant are Operating tours without examining the specific activit .....

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on 65(105)(h) of the Act? It is apparent that the said decision treats Outbound Tours as the service sought to be taxed. It can be seen that the Outbound Tours are not the taxable service. In fact the taxable service is not Tours or Outbound tours for that matter. The taxable service is Any service provided (or to be provided) to any person, by a tour operator in relation to a tour. Thus what was needed to be examined for the purpose of decision is the services provided in relation to the such T .....

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a statute or of a rule having the force of a statute. So far as the order shows, no argument was addressed to the Court on the question or not whether any direction could properly be made compelling the Municipal Corporation to construct a stall at the pitching site of a PG NO 939 pavement squatter. Professor P.J. Fitzgerald, editor of the Salmond on Jurisprudence, 12th edn. explains the concept of sub silentio at p. 153 in these words: "A decision passes sub silentio, in the technical sens .....

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tances, although point B was logically involved in the facts and although the case had a specific outcome, the decision is not an authority on point B. Point B is said to pass sub silentio. In Gerard v. Worth of Paris Ltd. (k)., [1936] 2 All E.R. 905 (C.A.), the only point argued was on the question of priority of the claimant's debt, and, on this argument being heard, the Court granted the order. No consideration was given to the question whether a garnishee order could properly be made on .....

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nt had to be decided by the earlier court before it could make the order which it did; nevertheless, since it was decided "without argument, without reference to the crucial words of the rule, and without any citation of authority", it was not binding and would not be followed. Precedents sub silentio and without argument are of no moment. This rule has ever since been followed. One of the chief reasons for the doctrine of precedent is that a matter that has once been fully argued and .....

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