TMI Blog2008 (8) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... Tour Operators Service at Agra, Gwalior, Jhansi, Khajuraho and Varanasi and has centralized service tax registration at Agra. The Appellant has entered into contract with various principal tour operators (PTOs), mostly based in Mumbai and Delhi. The PTOs provided the service of package tours to foreign tourists visiting India and the Appellant as per his contracts with the PTOs, provide to the clients of the PTOs i.e. foreign tourist - (a) the service of transport in tourists vehicles without any supplementary services like guide services, monument visit services, porter's services, food services, general assistance services etc.; and (b) services of transport in tourist vehicles alongwith the above mentioned supplementary services. 1.1 The Appellant while providing the above services to the foreign tourists, get the payment from the PTOs against the bills raised by them. However, they raised the bills only for the transport services and for the supplementary services debit notes are raised. There is no dispute about the liability to service tax of the amount being received by the Appellant for organizing transport of the tourists in tourists vehicles and the Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocal handling tour operators like the appellant. So the value of the taxable services provided by the Appellant is fly a part of the whole value of the taxable services provided by the PTOs, on which service tax has already been paid. The amount charged by the PTOs also includes the charges for the supplementary services like guide services, monument visit services, porter services, food services, general assistant services etc. The Appellant while providing the supplementary services on behalf of the PTOs, get the reimbursement for the expenses on these service from the PTOs on actual basis. Charging service tax on the supplementary services would, therefore, amount to taxing the same services twice. (3) The Commissioner in the impugned order has relied upon the Board's Circular No. 96/7/07 dated 23/8/07 for the purpose of levying service tax on the Appellant on the ground that the Appellant is a sub-contractor/sub-agent. As per this circular, a sub contractor is essentially a taxable service provider and the fact that the services provided by such sub-contractor are used by the main services provider for completion of his work, does not in any way alter the fact of provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 24,85,36,696/- on which the tax has been demanded in the show cause notice. (6) The show cause notice has been issued by invoking extended period of limitation of five years under Section 73 (1) of the Finance Act. There was no mis-declaration, or wilful mis-declaration or suppression of facts on behalf of Appellant. The Hon'ble Supreme Court in case of Pahwa Chemicals Private Ltd. vs. Commissioner - 2005 (189) E.L.T, 257 (S.C.) has held that mere failure to declare something does not amount to mis-declaration or wilful suppression of facts and that for proving mis-declaration, and wilful suppression of facts, some positive action on the part of the assessee is a must. In this case, the Appellant did not know about service tax liability in respect of supplementary services and they were under genuine impression that these supplementary services were not covered by the definition of tour operator service. For the same reason no penalty is imposable on the Appellant under Section 78. (7) As held by the Hon'ble Supreme Court in case of Hindustan Steel Ltd. vs. State of Orissa - 1978 (2) E.L.T. J 159 (S.C.) penalty could not be imposed simply because there i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for supplementary services against debit notes, which were in fact part of the gross amount being received by them as package tour operators, had never been disclosed in the ST-3 returns filed by them. 3. We have given careful consideration to the submissions from both the sides. The point of dispute in this case is as to whether the so called supplementary services i.e. the services of providing guide services, monument visit services, porter services, food services, general assistance services etc. in connection with tours is covered by the definition of tour operator's service and whether the amount received by the Appellant for the supplementary services is liable to service tax. The period of dispute in this case from 01/4/02 to 31/03/07 and the same can be divided into two parts from 01/4/02 to 09/9/04 and from 10/9/04 to 31/03/07. During the period from 10/9/04 onwards the definition of tour operator as given in Section 65 (115) of the Act has been amended and as per the amended definition the tour operator means any person engaged in the business of planning, scheduling, organizing or arranging tours (which may include arrangements for accommodation, sight ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en to tax only the activity of arranging journey from one place to another place instead of the word taxable service in relation to a tour , the words taxable service of a tour would have been used. Hon'ble Supreme Court in the case of Tamil Nadu Kalyana Mandapam Assn. vs. Union of India reported in 2006 (3) S.T.R. 260 (S.C.) while interpreting the scope of the expression services provided in relation to use of Mandap in any manner has observed that the phrase - in relation to has been construed by this court to be of widest amplitude. We also find that when the tour operator service had been brought within the purview of service tax in the year 1997, the tax research unit of the Central Board of Excise and Customs vide Circular No. 43/10/97-TRU dated 22/08/97 had explained the scope of this service as under:- the services rendered by the tour operator may be only for providing transport service within or outside the town, city or its territorial limits. The services rendered by the tour operators may only be limited to providing transport service in relation to a tour or it may also include host of other services as in case of package tour. The services provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut these services only when a detailed enquiry in this regard was made in February 2007. We, therefore, hold that the extended limitation period of five years has under proviso to Section 73 (1) of the Finance Act, 1994 has been rightly invoked by the Adjudicating Authority. 5. Another plea of the Appellant is that the gross amount of Rs. 24,85,36,696/- on which the service tax liability of Rs. 1,15,70,655/- has been calculated also includes an amount of Rs. 60,26,174/- given as temporary advance to tour escorts and an amount of Rs. 42,24,160/- on account of inter branch billing. The service tax is chargeable only on the gross amount received by the Appellant from PTOs against the bills/debit notes raised by the Appellant for the services provided by them in relation to the tours and this would not include the amount given as temporary advance to tour escorts which has been reimbursed by the PTOs or the amount on account of inter branch billing. We, therefore, held that no service tax would be chargeable on these amounts and the service tax liability of the Appellant has to be re-worked by the Adjudicating Authority by excluding these amount from the gross amounts. 6. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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