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M/s. Lufthansa German Airlines Versus Commissioner of Central Excise & ST, Delhi (Gurgaon)

2017 (9) TMI 715 - CESTAT CHANDIGARH

Valuation - includibility - PSF - Airport charges - whether PSF and Airport charges collected by the appellant are to be included in the service provided by them under the category of Transportation of Passengers by Air services or not? - Held that: - the appellant has complied with the condition of Rule 6 of Service Tax (Determination of Value) Rules, 2006 and the same are not includable in the assessable value of service provided by the appellant, as the impugned period is, post 27.02.2010 - t .....

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enger Service Fee (PFS) and Airport Tax are not includable in the assessable value of the services provided by them - appeal allowed - decided in favor of appellant. - Appeal No. ST/51515/2014-DB - Final Order No. 61764 /2017 - Dated:- 8-9-2017 - Mr. Ashok Jindal, Member ( Judicial ) And Mr. Devender Singh, Member ( Technical ) Shri Tarun Jain, Advocate for the Appellant Shri Satyapal, A.R. for the Respondent ORDER Per : Ashok Jindal The appellant is in appeal against the impugned order demandin .....

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t Tax for the passengers undertaking international journey. The appellant collected PSF in terms of Rule 88 of the Air Craft Rules, 1937 read with the Ministry of Civil Aviation instructions permitting the Airport Authority to collect these charges. Airport taxes are levied by the respective authority of the country to which the international journey takes place. Both the PSF and Airport Tax collected by the appellant are remitted to the concerned authority on actual basis. Revenue is of the vie .....

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5-TIOL-1481-CESTAT-DEL wherein it has been held that PSF and Airport tax cannot be included for the purpose of determining the liability of service tax. Therefore, on this ground, impugned order is to be set-aside. He further submits that in their own case, reported as 2016-VIL-2014-CESTAT-DELHI, these charges are not to be considered for levy of service tax. He further submits that the Tribunal has held that the element of PSF and Airport Tax are not liable to service tax in the light of the de .....

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5 (39) STR 35 (Tri.), has categorically declared that PSF is liable to service tax in the hands of the Airport authority and it is towards the services provided by it and therefore, service tax is not payable by the appellant. He further submitted that in the case of Airport Authority of India (supra) it has been submitted that PSF and Airport tax are Revenue of the airport authority and liable to tax in their hands, therefore the same cannot be again made liable in the hands of the appellant. T .....

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of the said Rules, demand is not sustainable. Consequently, impugned order is to be set-aside. 5. On the other hand, ld. AR relied upon the decision of the Tribunal in the case of Air Canada vs. CST, New Delhi Final Order No. 52137/2017 dated 01.03.2017 to say that these charges are includable in the assessable value of the service provided by the appellant. 6. Heard both sides and considered the submissions. We find that the short issue involved in the matter is that, whether PSF and Airport c .....

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for the appellant submitted a part of Passenger Air Tariff, General Rules, 2010. It is submitted that this is the mandate for the members of IATA. The said compilation indicates country-wise taxes and fee to be paid by the Airlines. While we note that any amount collected from the passenger specifically identified for the particular service, to be rendered by other than the appellants, are not to be included in the gross value, it is necessary to establish with documentary evidence the backgrou .....

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that the present inclusion is not on the basis of provisions of Rule 5(1) of Service Tax (Determination of Value) Rules, 2006. The said rule mentions about expenditure or cost incurred by the service provider in the course of providing taxable service. In the present case, we are not dealing with any expenditure or cost incurred by the appellant in providing any service. Their claim is that these amounts (PSF and Airport taxes) are collected on behalf of the Airport Authority. In the absence of .....

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efore, are not includible in the assessable value for the purpose of levy of service tax. Unless, these facts are established the ratio cannot be universally adopted for all airlines. As, already noted, categorical evidences are not forthcoming in the present appeal, in spite of specific query by the Bench. 6. Accordingly, we find that the appeal cannot be sustained due to failure to establish the facts. Accordingly, the same is dismissed. 7. The appellant is relying on Rule 6 of the Service Tax .....

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