TMI Blog2023 (6) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... erit - Appeal allowed. - Service Tax Appeal No. 11248 of 2013-DB Service Tax Appeal No. 11249 of 2013-DB - Final Order No. A/ 11271 – 11272 /2023 - Dated:- 14-6-2023 - HON'BLE MEMBER (TECHNICAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. C.L.MAHAR Shri Wasim Shaikh, Authorised Signatory appeared for the Appellant Shri Kalpesh P Shah, Assistant Commissioner (AR) for the Respondent ORDER C. L. MAHAR The brief facts of the case are that the appellant are engaged in providing travel agent service and registered with the service tax department under the taxable service category of Air Travel Agent, Cab Operator and Rail Travel agent service as per the provision of Section 69 of Finance Act, 1994. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... along with interest and penalty. These Show Cause notices were confirmed by the Adjudicating Authority and the same was challenged by the appellant before the Commissioner (Appeals) who vide the impugned order No. PJ/601-602/VDR-I/2012-2013 sated 21.03.2013 adjudicated both Orders-In Original and held that the amount of Overriding Commission received by the appellant from various airlines is taxable under business auxiliary service category. The same Order-In-Appeal has been challenged before us. 4. We have heard both sides and came to notice that the issue of Overriding Commission has already been decided by the Larger Bench of this Tribunal in the case of M/s. Kafila Hospitality Travels Pvt. Ltd Vs. reported under 2021 (47) G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harged, is equivalent to the consideration; (iii) in a case where the provision of service is for a consideration which is not ascertainable, be the amount as may be determined in the prescribed manner. (emphasis supplied) 75. Section 67 of the Act deals with valuation of taxable services for charging service tax. Sub-section (1) of Section 67 provides that where service tax is chargeable on any taxable service with reference to its value, then such value shall, where the provision of service is for a consideration in money, be the gross amount charged by the service provider for such service provided or to be provided by the service provider. It is, therefore, clear that only such amount is subject to service tax which represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dependent on each booking and not on the target. If the air travel agent does not achieve the predetermined target, incentives will not be paid to the travel agents. 78. In this connection it will be appropriate to take note of the decision of the Federal Court of Australia AP Group. The Federal Court of Australia held that in order to levy tax, the payment must be attributable to a particular supply and not to supplies in general and so the target incentives paid by a motor vehicle manufacturer to a dealer would not qualify as consideration as the incentives would be in relation to all supplies and not in relation to a particular supply. The relevant portion of the decision of the Federal Court is reproduced below :- 17. Insof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion with the making of supplies generally. I06 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first issue that arises for consideration is whether service tax would be leviable on incentives prior to July, 2012. As noticed above, the appellant purchases vehicles from MUL and sells the same to the buyers. It is clear from the agreement that the appellant works on a principal to principal basis and not as an agent of MUL. This is for the reason that the agreement itself provides that the appellant has to undertake certain sales promotion activities as well. The carrying out of such activities by the appellant is for the mutual benefit of the business of the appellant as well as the business of MUL. The amount of incentives received on such account cannot, therefore, be treated as consideration for any service. The incentives re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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