9911796707
TMI Blog2024 (4) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... leased by them. Initially, air transportation service was taxable under Section 65(105)(zzzo) of the Finance Act, 1994 as transport of passenger embarking in India for international journey by air services which covers both scheduled as well as non-scheduled air transport service under its ambit. However, before 21.06.2010, service tax was leviable only in cases where such air transportation service is provided for an international journey in any class other than economy as the domestic journeys had been kept outside the ambit of service tax. Accordingly, the appellant obtained service tax registration under the category of 'Transport of Passenger by Air service' and was discharging service tax liability in respect of international journeys. The scope of taxable service has been expanded and the service of domestic travel became a taxable service under the category of air transportation services w.e.f. 21.06.2010. Accordingly, the appellant started discharging service tax liability in respect of domestic journey as well, after availing the benefit of exemption granted vide Notification Nos. 26/2010-ST & 27/2010-ST dated 22.06.2010 (effective from 01.07.2010). 3. The Department ini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant for the first time in June 2010, on the ground that the appellant should discharge its tax liability under the category of 'supply of tangible goods for use services'. However, no Show Cause Notice had been issued at that point of time. Another proceeding has been initiated against the appellant in the year 2012. They submit that after expiry of 3 years from the initiation of first investigation proceeding in month of June 2010, the appellant has been served with the impugned Show Cause Notice invoking extended period and alleging wilful evasion of Service Tax; that the dispute in this case is related to classification of taxable services under appropriate category which involves interpretation of the statutory provisions and they have been filing the returns regularly; therefore, the demand of service tax invoking extended period of limitation is not sustainable. 4.3. In support of the above contention. the appellant placed their reliance on the following judicial pronouncements - (i) EIH LTD. Versus Commissioner of Central Excise, Delhi-I [2019 (24) G.S.T.L. 592 (Tri. - Del.)] (ii) Adani Enterprise Ltd. Versus Commissioner of Service Tax, Ahmedabad [2022 (63) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities. Thus, in terms of aforementioned conditions of lease rental agreement, the transfer of right to use involves transfer of both possession and control of aircraft in favour of the appellant. Accordingly, it is their submission that the subject transaction constitutes 'deemed sale' of goods and the said transaction is outside the purview of service tax. 5.3. The appellant further submits that the import of the subject aircraft has also been assessed as 'goods' by the Customs authority vide Bill of Entry no. 235089 dated 26.08.2008 which is in line with the clarification issued by Tax Research Unit ('TRU'), Ministry of Finance vide its letter bearing D.O.F No.334/1/2008-TRU dated 29-02-200 and hence the said transaction cannot be subject to service tax since Imposition of service tax on the same transaction would tantamount to double taxation. 5.4. In the impugned order, the contention of the appellant regarding "Deemed Sale" has been rejected based on the view that no "effective control" has been transferred to appellant and thus the same cannot be considered as 'deemed sale' of goods instead the same should be considered as 'supply of tangible goods for use services' a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnot be alleged in this case. We also observe that the appellant has been filing the returns regularly and they have not suppressed any information from the Department. Accordingly, we hold that the demand of service tax confirmed in the impugned order by invoking extended period of limitation is not sustainable. 8.2. We observe that this view has been held by Tribunal in the case of M/s. EIH LTD. Versus Commissioner of Central Excise, Delhi-I [2019 (24) G.S.T.L. 592 (Tri. - Del.)], wherein the Tribunal has held as under: - "9. Once the issue of classification is adjudicated the another issue of limitation is yet to be considered, as it being another ground of challenging the impugned order. It is apparent from the show cause notice dated 21-12-2010 that a demand for the period w.e.f. May, 2008 to May, 2010 has been raised. It becomes apparently clear that while issuing the said show cause notice, Department has invoked the longer time limit as mentioned in proviso to Section 73 of the Act. The law for invoking extended period of limitation is stated that the onus heavily rest upon the Department to prove the alleged suppression of facts. Perusal of entire record shows no such d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in the present matter also provided all the details/documents/records related to the disputed activity before department. In this circumstances charge of suppression or wilful misstatement do not survive against the Appellant. Thus extended period of limitation is also not invokable in the present matter and no penalty is payable." (Emphasis supplied) 8.4. In terms of Section 73 of the Finance Act, 1994, a period of 1 (one) year from the relevant date has been prescribed to serve the Notice on the person chargeable with the service tax which has not been levied or paid or short levied or short paid. This period of one year has been increased to 18 months w.e.f. 28.05.2012. In the present case, the demand of service tax has been raised for the period 2008-09 to 2011-12 vide the impugned Show Caise Notice dated 18.10.2013. At the time of issue of the Notice, 18 months from the relevant date was available for issue of the demand without invoking suppression clause. Accordingly, we hold that the appellant is liable to pay service tax along with interest for the normal period of limitation, under the category of 'supply of tangible goods service'. As no suppression of fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As possession and effective control has been transferred to the appellant, the demand of service tax under the category of 'supply of tangible goods' is not sustainable. 9.3. We also observe that the subject aircraft has been assessed as 'goods' at the time of import, by the Customs authority vide Bill of Entry no. 235089 dated 26.08.2008, which is in line with the clarification issued by Tax Research Unit ('TRU'), Ministry of Finance vide its letter bearing D.O.F No.334/1/2008-TRU dated 29-02-2008. 9.4. In view of the above discussions, we hold that the demand confirmed in the impugned order on this count is not sustainable and hence, we set aside the same. As the demand of service tax is not sustainable, the demand of interest and penalty is also not sustainable. 10. In view of the above discussions, we pass the following order: (i) Regarding the demand of service tax of Rs.2,39,21,555/- under the category of 'supply of tangible goods service', the demand of service tax confirmed in the impugned order by invoking extended period of limitation is set aside. The appellant is liable to pay service tax along with interest for the normal period of limitation, unde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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