TMI Blog2020 (3) TMI 376X X X X Extracts X X X X X X X X Extracts X X X X ..... y to the show cause notice that the commission received on fuel surcharge could not have been subjected to levy of service tax under rule 6 (7) of the Rules, but there is no discussion of this issue in the impugned order. The appellant contends that out of the seventy three airlines only four airlines pay commission on fuel surcharge and, therefore, it cannot be said that commission is normally paid to the air travel agent by the airlines on fuel surcharge. It was, therefore, obligatory on the part of the Principal Commissioner to have considered this issue raised by the appellant in response to the show cause notice, but that has not been done. The matter, therefore, has to be remitted to the Principal Commissioner to decide this issue - It is only when this issue is decided against the appellant, that would be necessary for the Principal Commissioner to take recourse to the provisions of section 72 of the Act for determination of the taxable value. This issue again would have to be decided by the Principal Commissioner afresh as it has been submitted by the learned Authorized Representative of the appellant that a new method was adopted by the Principal Commissioner without pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... like :- (i) Basic fare (ii) YQ = (fuel surcharge) (iii) WO = (passenger service fee) (iv) Other tax. 3. The Appellant is required to submit a Billing Settlement Plan BSP statement every fortnight of every airline. This statement gives the breakup of the fare of the ticket between basic fare, fuel surcharge, miscellaneous expenses and other charges. This amount, it is claimed, is not the income of the Appellant, but is the amount payable to the airlines. The income of the Appellant is only from the commission received from the airline, which is accounted for in the financial ledger. 4. A show cause notice dated 16 April 2013 was issued to the appellant. It mentions that during the audit conducted in March/April 2013 for the period 2007-2008 to 2010-2011, the appellant produced records pertaining to the period 2010-2011 and 2011-2012 only. The show cause notice, therefore, computed the value of taxable service under section 72 of the Act that relates to best judgment assessment. A demand on various other charges under different categories recovered by the appellant was also made and the appellant was also denied Cenvat credit. 5. The appellant filed a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12,500/- has been demanded on this. 7. The learned Authorized Representative of the Department has, however, supported the impugned order and has stated that since the appellant did not furnish the records for the years 2007-2008, 2008-2009 and 2009-2010, the Principal Commissioner was justified in computing the taxable income on the basis of best judgment assessment as contemplated under section 72 of the Act. The learned Authorized Representative also submitted that the commission paid on fuel surcharge would be included in the basic fare as it is normally paid by the airlines to the travel agents. Learned Authorized Representative has also submitted that the demand on other heads has been correctly confirmed. 8. The submissions advanced by the learned Authorized Representative of the appellant and the learned Authorized Representative of the Department have been considered. 9. According to the learned Authorized Representative of the appellant, the main dispute is with regard to the service tax on the commission received by the appellant, which is to the extent of ₹ 7,75,00,000/- out of the total demand of ₹ 8,15,00,000/- that has been confirmed by the Pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Air Travel Agent by the Airlines. The explanation to Rule 6(7) defining the term basic fare clearly indicates that the basic fare for the purpose of this sub-rule is not the gross fare but is the part of the gross airfare charged from the passengers on which the Airlines normally pay commission to the Air Travel Agent. The expression air fare on which the commission is normally paid means the portion of airfare, whether 100% or a lesser percentage, on which most of the Airlines pay the commission ignoring1 the stray cases in which commission is paid on a different part of airfare. The appellant s plea is that they have discharged Service Tax liability under Rule 6(7), only on that part of the gross airfare on which the commission was paid to them by the Airlines and most of the Airlines pay commission only on that portion of fare. In other words, the appellant s plea is that they have paid Service Tax on the basic fare as defined in the Rule. The department's contention, however, is that since the appellant have not given the break-up of the gross fare into basic fare and the fuel surcharge to enable the department to determine the basic fare component for the purpose o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the taxable value. This issue again would have to be decided by the Principal Commissioner afresh as it has been submitted by the learned Authorized Representative of the appellant that a new method was adopted by the Principal Commissioner without providing any opportunity to the appellant to make submission. The appellant contends that commission is not charged in international bookings but this has also been taken into consideration by the Principal Commissioner. Certain other issues have also been raised by learned Chartered Accountant of the appellant to dispute the correctness of the method adopted by the Principal Commissioner. As this issue may have to be considered afresh by the Principal Commissioner, if a finding is recorded against the appellant on the first issue, it is not considered appropriate to deal with this issue on merits. All the contentions with regard to this issue are left open to be decided by the Principal Commissioner afresh. 15. Learned Chartered Accountant of the appellant has also made submissions on the denial of Cenvat credit to the appellant and also confirmation of demand under other heads of services. In this connection, it has been pointed ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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