TMI Blog2021 (3) TMI 773X X X X Extracts X X X X X X X X Extracts X X X X ..... lines? - HELD THAT:- For an activity to be considered as promotional, it is necessary that a service provider must promote or endorse the service of the client. It has, therefore, to be seen whether in the present case the travel agent is encouraging a passenger to purchase a ticket of a particular airline. The facts reveal that the travel agent is only providing options to the passenger and it the passenger who determines the airline for travel. It is only when the target of having achieved the pre-determined number of bookings is achieved that the airline pays an incentive to the travel agent. It cannot, therefore, be said that the travel agent is promoting the services of any airline. Incidentally, the airlines may benefit if more tickets are sold, but this would not mean that the travel agent is providing a service for promoting the airlines - by rendering of services connected to travel by air, a travel agent would render air travel agent services, which services cannot be said to be for promotion or marketing for the airlines. Whether the air travel agent is promoting the business of CRS companies? - HELD THAT:- Mere selection of software or exercising of a choi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in terms of section 67 of the Finance Act or rule 6 (7) of the 1994 Rules, no further service tax could be demanded on the amount paid to or passed on by the IATA agent. Application disposed off. - HON BLE MR. JUSTICE DILIP GUPTA, PRESIDENT, HON BLE MR. S. S. GARG, MEMBER (JUDICIAL) AND HON BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Anil Sood, Shri Sameer Sood, Ms. Jyoti Yadav and Ms. Madhumita Singh, advocates for the Appellant. Shri Badri Narayan, Counsel for the Intervener Shri J.P. Singh, Shri Vivek Pandey and Shri R.K. Maji, Authorized Representatives for the Department at Delhi. Shri Suresh Merogu, Authorized Representative for the Department at Mumbai. Shri Rajesh Rai and Shri Vijay Kumar Gupta, Authorized Representatives for the Department at Chandigarh. ORDER JUSTICE DILIP GUPTA: A Division Bench of the Tribunal, while hearing this appeal expressed doubts on the view taken by another Division Bench of the Tribunal in D. Pauls Consumer Benefit Ltd. vs. Commissioner of Central Excise, New Delhi, 2017 (52) S.T.R. 429 (Tri.-Del.) and accordingly, has referred the matter to a Larger Bench of the Tribunal for determina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ortals for booking tickets for the passengers/sub-agents. Earlier, the IATA agents were charged by the CRS Companies for access to the portals. However, due to increasing competition in the market, the CRS Companies stopped charging the agents for booking through the portal and instead, in order to increase the flow of business, the CRS Companies started to part with a portion of their consideration (charges/commission) and paid the same to the IATA agents when the agents achieve a minimum quantum of bookings through the concerned CRS portal. This incentive is normally termed as CRS commission . The three CRS Companies involved are Amadeus India Private Limited, Amadeus, Interglobe Technology Quotient Pvt. Ltd., Galileo and Abacus India, Abacus. 5. A show cause notice dated October 21, 2011 covering the period 2005-06 to 2009-10 was issued to the appellant as the Department sought to levy service tax on the following :- (i) Target based incentives paid to the travel agents, under the category of business auxiliary service ( BAS ) by alleging that the travel agents are promoting and marketing the business of the airlines; and (ii) CRS commission paid by the CRS Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accordingly. 8. In regard to the second issue, the Commissioner recorded the following findings :- 23. In this regard I find that there is no dispute that the noticee has purchased Air Ticket for its clients from the other IATA agents who for booking the tickets gets commission from the concerned Airlines. I observe that on each and every purchase of Air Tickets the ratio of the commission of the other IATA agents does increase and so the interest of the other IATA agents are also promoted and that is why the other IATA agents share the said commission with the noticee. Therefore, there remains no iota of doubt that the noticee has promoted the business of other IATA agents and received the commission against such promotional activity during the period under dispute which is appropriately covered and taxable under Business Auxiliary Services as defined in Section 65(19)(ii) as Promotion or marketing of service provided by the client; or read with section 65(105)(zzb) of the Act and I hold it accordingly. 9. The Commissioner, thereafter, by order dated May 16, 2013, confirmed the demand of service tax by invoking the extended period of limitation contemplated under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. M/s. FCM Travel Solutions (I) Private Limited Order in Original No. 98-2018-ST dated 30.10.2018 CESTAT, Chandigarh 3. M/s. SOTC Travel Limited Order in Original No. 32-ST-D-I-2015 dated 30.09.2015 CESTAT, New Delhi 12. Another application had been filed by M/s Riya Travels Tours (I) Pvt. Ltd. with a similar prayer stating that it proposes to file an appeal against the order dated February 10, 2021 passed by the Principal Commissioner, in which same issues are involved. 13. The intervention applications have been opposed by Shri Suresh Merogu learned Authorized Representative of the Department at Mumbai and Shri Rajesh Rai and Shri Vijay Kumar Gupta, learned Authorized Representatives of the Department at Chandigarh. They have submitted that only some of the issues referred to the Larger Bench arise for consideration in the pending appeals and in any view of the matter, the parties would have an opportunity to raise all the issues before the Division Benches at the time when these appeals are heard. Learned Authorized Representatives also pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese two issues relating to the intervention applications and the admissibility of the reference to the Larger Bench need to be decided first. INTERVENTION APPLICATION 17. It is not in dispute that three appeals referred to in the intervention application are pending before Benches of the Tribunal at Mumbai and Chandigarh and also before Principal Bench of the Tribunal at New Delhi and that some of the issues referred to the Larger Bench also arise for consideration in these appeals. Any decision taken by the Larger Bench on these six issues that have been framed would necessarily have an impact on the appeals pending before the Division Benches. The submission made by learned Authorized Representatives of the Department that only some of the issues referred to the Larger Bench may be involved in the appeal cannot be a ground to reject the intervention application. The Division Benches of the Tribunal would be bound by the decision of the Larger Bench on these issues. This will, therefore, not be a good reason to deny an opportunity to the applicants to make submissions before the Larger Bench. 18. The second objection raised by the learned Authorized Representatives of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n February 12, 2018. Thus, the order of the Division Bench of the Tribunal in D. Pauls stood merged with the order of the Supreme Court and hence cannot be reconsidered by this Larger Bench. 23. To appreciate this contention it is necessary to reproduce the order of the Supreme Court passed in the appeal. It is as follows :- 1. Delay condoned. 2. Learned Counsel prays for and is permitted to move the Learned Tribunal for reconsideration of the impugned order insofar as the issue with regard to invocation of the extended period of limitation is concerned. 3. The appeal is disposed of in the above terms. 24. It needs to be noted that the Division Bench of the Tribunal in D. Pauls had not examined whether the extended period of limitation contemplated under the proviso to section 73(1) of the Finance Act was correctly invoked. It appears that it is for this reason than when the appeal came up for hearing before the Supreme Court, the learned counsel for the appellant prayed for permission to move the Tribunal for reconsideration of the impugned order in so far as the invocation of the extended period of limitation was concerned, for if this issue is decided in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also observed that an order refusing Special Leave to Appeal does not attract the doctrine of merger, but if the order refusing Leave to Appeal is a speaking order, then the statement of law contained in the order of the Supreme Court is a declaration of law by the Supreme Court, which would be binding under article 141 of the Constitution. The Supreme Court also observed that on an appeal having been preferred or a petition seeking Leave to Appeal having been converted into an appeal, the jurisdiction of the High Court to entertain a review petition is lost. 28. It is on the basis of the aforesaid principles of law laid down by the Supreme Court that the learned Authorized Representatives submitted that since an appeal was provided against the order of the Tribunal to the Supreme Court and the Supreme Court disposed of the appeal, the order of the Tribunal would merge in the order of the Supreme Court and so the reference before the Larger Bench, doubting the correctness of the decision of the Tribunal, would not be maintainable. 29. The issue that would arise for consideration is whether the reasoning given by the Tribunal merged in the order of the Supreme Court or only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce of the concerned State. The learned counsel now prays for time to implead the State of Tamil Nadu. This appeal is of the year 1973. In our view it is neither necessary nor proper to allow this prayer at this distance of time. No other point survives in these appeals. Therefore, we dismiss these appeals, but without any order as to costs. (emphasis supplied) 31. The Division Bench of the High Court hearing the challenge to the constitutional validity of Act No. 2 of 1996 entertained doubts on the view taken by the earlier Division Bench of the High Court in Pillai and, therefore, referred the matter to a Full Bench of the High Court. When the Full Bench of the High Court took up the hearing of the writ petitions, the aforesaid order of the Supreme Court dated September 10, 1986 was brought to its notice. The Full Bench held that since the appeal against the decision of the Division Bench in Pillai was dismissed by the Supreme Court, the decision of the High Court merged in the order of the Supreme Court and so the Full Bench could not examine the correctness of the law laid down by the Division Bench in Pillai . 32. It is against the aforesaid decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remain the decision of the High Court, binding as a precedent on subsequent Benches of coordinate or lesser strength but open to reconsideration by any Bench of the same High Court with a coram of judges more than two. The Supreme Court, it needs to be noted, also observed that the Full Bench of the High Court was not hearing a prayer for review of the order passed by the Division Bench in Pillai . Thus, a clear distinction had been drawn by the Supreme Court in cases when a Larger Bench is hearing a reference and when it is hearing a review petition after the dismissal of an Appeal by the Supreme Court. A review petition would not be maintainable before the High Court after the dismissal of the Appeal by the Supreme Court, but the decision can be reconsidered by a Larger Bench of the High Court if the Supreme Court had not adjudicated on the merits of the order of the High Court. The Supreme Court, therefore, set aside the order of the Full Bench of the High Court and restored the appeal before the Full Bench to be heard and decided in accordance with law. The relevant portion of the judgment of the Supreme Court is reproduced below :- 10. Firstly, the doctrine of merger. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or revisional jurisdiction. (emphasis supplied). Recently a three-Judge Bench of this Court had an occasion to deal with doctrine of merger in Kunhayammed and Ors. v. State of Kerala and Anr., [2000] 6 SCC 359 and this Court reiterated that the doctrine of merger is not of universal or unlimited application; the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or which could have been laid, shall have to be kept in view, (emphasis supplied). In this view of the law, it cannot be said that the decision of this Court dated 10.9.1986 had the effect of resulting in merger into the order of this Court as regard the statement of law or the reasons recorded by the Division Bench of the High Court in its impugned order. The contents of the order of this Court clearly reveal that neither the merits of the order of the High Court nor the reasons recorded therein nor the law laid down thereby were gone into nor they could have been gone into. 12. Thirdly , as we have already indicated, in the present round of litigation, the decision in Varadaraja Pillai's case was cited only as a precedent and not as res judicata. The is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdiction which was invoked, could not by itself be construed as the imprimatur of the superior forum on the correctness of the decisions sought to be appealed against. In Supreme Court Employees Welfare Association v. Union of India and Ors. AIR (1990) SC 334 this Court observed that a summary dismissal, without laying down any law, is not a declaration of law envisaged by Article 141 of the Constitution. When reasons are given, the decision of the Supreme Court becomes one which attracts Article 141 of the Constitution which provides that the law declared by the Supreme Court shall be binding on all the courts within the territory of India. When no reason are given, a dismissal simpliciter is not a declaration of law by the Supreme Court under Article 141 of the Constitution. In Indian Oil Corporation Ltd. v. State of Bihar and Ors., AIR (1986) SC 1780 this Court observed that the questions which can be said to have been decided by this Court expressly, implicitly or even constructively, cannot be re-opened in subsequent proceedings; but neither on the principle of res judicata nor on any principle of public policy analogous thereto, would the order of this Court bar the trial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 18. The Full Bench was not dealing with a prayer for review of the earlier decision of the Division Bench in M. Varadaraja Pillai's case and for setting it aside. Had it been so, a different question would have arisen, namely, whether another Division Bench or a Full Bench had jurisdiction or competence to review an earlier Division Bench decision of that particular Court and whether it could be treated as affirmed, for whatsoever reasons, by the Supreme Court on a plea that in view of the decision having been dealt with by the Supreme Court the decision of the High Court was no longer available to be reviewed. We need not here go into the question, whether it was a case of review, or whether the review application should have been filed in the High Court or Supreme Court. Such a question is not arising before us. 19. Under Article 141 of the Constitution, it is the law declared by the Supreme Court, which is binding on all Courts within the territory of India. Inasmuch as no law was declared by this Court, the Full Bench was not precluded from going into the question of law arising for decision before it and in that context entering into and examining the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation was rejected. The Board subsequently reopened the case, but the respondent filed a revision before the High Court to challenge the order of the Board reopening the case. The main ground for challenge was that the earlier order of the Board had merged with the revisional order of the High Court. The High Court allowed the revision holding that the earlier order of the Board had merged in the order of the High Court. This reasoning of the High Court was not accepted by the Supreme Court and it was held that the order of the Board had not merged in the order of the High Court since the revision was dismissed on the ground of rejection of the application filed for condonation of delay and not on merits. The observation are as follows :- 20. It is clear that the Board vide its order dated 13-6-1985 held that the respondents were not liable to surrender any land. However, it cannot be said that the aforesaid order has merged with the order of the High Court dismissing the Revision petition of the appellant State as the same was dismissed on the ground of rejection of the application for condonation of delay and not on merits. 21. In this connection, the decision of this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plied) 36. In Godrej Boyce, the Bombay High Court also observed that one of the criteria for application of the doctrine of merger is that the appeal should not have been dismissed on the ground of limitation or failure to deposit as ordered and the appeal should have been heard and decided on merits on the issues raised. 37. Learned Authorized Representatives of the Department have however, placed reliance upon a Larger Bench decision of this Tribunal in S. Kumar s. This decision has relied upon the decision of the Supreme Court in Kunhayammed . The Supreme Court in Nadar , as noticed above, explained in detail what part of the order of the High Court or the Tribunal would actually merge in the order of the Supreme Court. This decision of the Larger Bench of the Tribunal is also contrary to the decisions of the Supreme Court in Nadar , Technoweld and Kondottyparambanmoosa , which decisions are binding under article 141 of the constitution. The decision in S. Kumar s would, therefore, not help the Department. 38. The order passed by the Supreme Court in D. Pauls can be examined from another point of view. A perusal of the order clearly indicates that in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er it transpires that the following two main issues arise for determination :- (a) Whether service tax can be levied under the category of business auxiliary service on target based incentives paid to the travel agents by airlines by alleging that the travel agents are promoting and marketing the business of the airlines; and (b) Whether the commission paid by CRS Companies to travel agents can be subjected to service tax under the category of business auxiliary service by alleging that the travel agents are promoting and marketing the business of such companies. 42. Shri Anil Sood learned counsel for the appellant made the following submissions :- (i) Incentives are not taxable and in the support of this contention reliance has been placed upon a decision of this Tribunal in M/s. Rohan Motors Limited vs. Commissioner of Central Excise, Dehradun, 2020 (12) TMI 1014 CESTAT New Delhi; (ii) Once an option under rule 6 (7) of the Service Tax Rules 1994, 1994 Rules is exercised, no further liability arises; (iii) Any activity in relation to booking of passes by air travel agents would be covered under air travel agency services as defined under section 65(4) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to book the ticket. Hence, the service cannot fall under air travel agent service. Rather, it being an activity of promotion of the functionality (service) provided by the CRS Companies, would fall within the definition of BAS under section 65(19) read with section 65(105)(zzb) of the Finance Act; (ii) A perusal of the agreements would indicate that the transaction of booking of an air ticket is not the essential feature of the contract. The essential feature is an activity that happens before the booking of air tickets. This activity is the exercise of choice by the appellant to prefer a particular software system. Infact, the transaction of a single ticket for a particular passenger and for a particular airline, becomes an incidental activity to the main activity of subscribing and owing allegiance to a particular reservation functionally. This is promoting the business CRS software companies and, therefore, classifiable under sub-clause (ii) of the definition or BAS; and (iii) Rule 6(7) of the 1994 Rules is an option available only to an air travel agent. By the essential character test, the role of the appellant is not that of an air travel agent, but of a subscriber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns any service in relation to:- (i) xxxxxxxx (ii) promoting or marketing of service provided by the client; (iii) xxxxxxxx to (vii) xxxxxxxx 50. This is a taxable service under section 65(105)(zzb) of the Finance Act and the relevant portion is quoted below :- 65(105)(zzb) taxable service means any service provided or to be provided to a client, by any person in relation to business auxiliary service. 51. Air travel agent has been defined in section 65(4) of the Finance Act and the relevant portion is reproduced below :- 65(4) air travel agent means any person engaged in providing any service connected with the booking of passage for travel by air. 52. It is taxable under section 65(105)(l) of the Finance Act and it is reproduced below :- 65(105)(l) taxable service means any service provided or to be provided to any person by an air travel agent in relation to the booking of passage for travel by air 53. The issues shall now be considered separately. Whether the air travel agent is promoting it own business and not the business of the airlines 54. According to the appellant/interveners, the air travel agents are render ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to whether the argument regarding the factual position involved is correct. The learned senior counsel appearing on behalf of the petitioners argues that the commission that the air travel agents earn from the airlines is not on account of the services that they give to the air-travellers but because they procure business for the airlines. This is the basic submission. Now, it is obvious that the airlines give the commission to the air travel agents and undoubtedly the air travel agents provide business for the airlines. However, it has to be noted that unless the air travel agents provide a service to the customers, there would be no question of their getting a commission from the airlines. It is not as if the air travel agents get a fixed commission or income from the airlines irrespective of the passages booked by them in favour of the customers in the nature of a retainer fee or guarantee money , at least that is not the case pleaded before us. Therefore, unless the air travel agents book the tickets and thereby unless they provide the services to the customers, they do not become entitled to any commission. Their commission is entirely depended on and connected with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 171 (Kerala) also needs to be referred to in this connection. A sub-agent was receiving commission for booking airlines ticket through IATA agent. The contention of the Department that the sub-agent was rendering BAS to IATA agent was not accepted by the High Court and it was held when an assessee is in the business of booking air tickets though another air travel agent, the assessee essentially renders air travel agent services to the main travel agent and would, therefore, not be liable to pay service tax under the category of BAS. The relevant portion of the judgment is reproduced below :- 2. The order under challenge is one issued by CESTAT holding that the respondent is engaged in travel agency business, which was brought under service tax net with effect from 10-9-2004. The respondent can be assessed for the service charges under the category, travel agency service. However according to the appellant, the respondent is engaged in business auxiliary service falling under Section 65(105)(zzb) of the Finance Act, 1994 with effect from 1-7-2005 and so much so, demand of tax under this head is tenable. We are unable to uphold the appellant's contention, because, admitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l agent to avail the services of a particular CRS Company. What is important to notice is that for an activity to qualify as promotional , the person before whom the promotional activity is undertaken should be able to use the services. The passenger cannot directly use the CRS software provided by the Company to book an airline ticket. It cannot, therefore, be said that a travel agent is promoting any activity before the passenger. 61. The matter can be examined from another aspect. For booking a ticket, a travel agent would require a system to book the tickets. A travel agent is free to choose any CRS system. A passenger would never request a travel agent to book his ticket only through Amadeus/Galileo/Abacus system. Can it, therefore, be said that the travel agent is engaged in the promotion of a particular CRS system. 62. In this connection reliance has been placed by the learned counsel for the appellant/interveners upon a Circular dated April 16, 2010 issued by Central Board of Excise and Customs relating to service tax on re-insurance commission. The relevant portion of the Circular is reproduced below :- In terms of Section 101A (Part IV-A) of the Insurance Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company was providing BAS to the re-insurance Company by promoting the business of the re-insurance Company. The Board clarified that such an arrangement between the insurance Company and the re-insurer Company was for sharing of expenses only and no BAS was rendered as the customer of the insurance Company was only unaware of the role of the re-insurer. The Circular, therefore, reinforces that if the audience of an alleged promotional service is unaware of the service of the client, no promotional or marketing services can be said to have been provided. 64. Learned Authorized Representative of the Department however submitted that the promotion of reservation functionality of a particular CRS Company is not an activity which is connected to the booking of air ticket per se, because the consideration received in the form of commission is not dependent on booking of ticket but dependent upon particular functionality of a particular CRS Company which has been used to book the ticket. Thus, the service cannot fall under air travel agent service but would be an activity of promotion of the services provided by CRD Company. The contention, therefore, of the learned Authorized R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sub-clause which occurs first among the sub-clauses which equally merits consideration. (emphasis supplied) 70. The two competing entries are air travel agent service and BAS . It would be seen from the definition of air travel agent that it includes all services connected with or in relation to the booking of passage for travel by air. The services in question are booking of airlines tickets and for achieving a pre-determined target, the air travel agent also receives an additional amount in the form of incentives/commission from the airlines or the CRS Companies. The receipt of incentives commission would not change the nature of the services rendered by the travel agent. 71. This apart, the definition of BAS would also reveal that the service provider must promote or market the service of a client. As noticed above, it is not a case where the air travel agent is promoting the service of airlines/CRS Companies. The air travel agent is, by sale of airlines ticket, ensuring the promotion of its own business even though this may lead to incidental promotion of the business of the airlines/CRS Companies. Thus, in terms of the provision of section 65A (2)(a) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ideration for provision of service cannot be subjected to service tax. 76. In this connection, it would be appropriate to refer to the decision of the Supreme Court in Union of India vs. Intercontinental Consultancy and Technocrats, 2018 (10) G.S.T.L. 401 (S.C.). The Supreme Court observed that service tax is on the value of taxable services and, therefore, it is the value of the services which are actually rendered which has to be ascertained for the purpose of calculating the service tax. It is for this reason that the expression such occurring in section 67 of the Act assumes importance. The Supreme Court, therefore, observed that the authority has to find what is the gross amount charged for providing such taxable services and so any other amount which is calculated not for providing such taxable service cannot be a part of that valuation as the amount is not calculated for providing such taxable service. This, according to the Supreme Court, is the plain meaning attached to section 67, either prior to its amendment on 1 May, 2006 or after this amendment. 77. Consideration, which is taxable under section 67 of the Finance Act, should be transaction specific. Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... haps more accurately, it is a payment made in connection with the making of supplies generally. 53. On analysis, the so-called supplies for consideration identified by the Commissioner are nothing more than the encouragement of an overall business relationship between the manufacture and the dealer to the mutual benefit of both. The relationship involves a whole raft of obligation from one to the other all, presumably, with the ultimate objective of maximizing their respective commercial positions. As the AP Group put it, the overall relationship contemplates a continuing dialogue between wholesaler and retailer in which promises are routinely exchanged, but to characterize this dialogue as involving supply after supply is unrealistic and impractical. To characterize the payment of the incentives intended to encourage the overall relationship to operate efficiently as involving supplies for consideration equally unpersuasive. A dealer will always wish to sell as many cars as practicable and to move old stock to make way for new stock. So too a dealer will always wish its ordering arrangements to be the most efficient and economically beneficial to it. The manufacture will hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a travel agent who had used the CRS system of Galileo, Amadeus and Abacus which had paid incentives to the appellant for the period from October 1, 2003 to December 21, 2008. The lower authorities had observed that the services provided by the appellant fell under the category of tour operator services as defined under section 65(11)(o) of the Finance Act. In the appeal before the Tribunal, the learned Authorized Representative of the Department had submitted that the services were covered under BAS . The Division Bench hearing the appeal observed that the services provided by the appellant were rightly covered under that heading of BAS as defined in section 65 (19) of the Finance Act. The relevant portion of the decision is reproduced below :- 2. The brief facts of the case are that, the assessee-appellants are registered under the category of Air Travel Agent s Services and they have been issuing air tickets of various airlines and paying Service Tax on the amount of basic fare. For the purpose, the assessee-appellants used Computer Reservation System (CRS) of M/s Galileo India, Amadeus India and Calleo Distribution to encourage their business, for which they have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... BAS . Infact, the Division Bench also observed that since the appellant was providing tour operator services, the commission received by them is for BAS under section 73 (1) of the Finance Act. There is no discussion in the decision as to why the commission received would fall under BAS . The decision also does not specify the particular sub-clause of section 65(19) of the Finance Act that defines BAS . It also needs to be noted that on behalf of the appellant it was contented that no marketing or promotion was conducted by the appellant since it is the choice of the appellant to choose a particular CRS Company and that the customer also does not even know under which CRS system the ticket was booked, but there is no discussion on this aspect nor is there any discussion on the submission of the appellant that the amount received from the CRS Companies cannot be treated as deemed commission since it was merely an incentive and did not attract service tax. 83. These contentions as to whether the air travel agent is promoting the business of the airlines or the CRS Companies have been dealt with in the earlier portion of this order. The order also discusses whether the clas ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
