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CUSTOM EXCISE & SERVICE TAX APPELLATE TRIBUNAL, BANGALORE
P.G. CHACKO, M. VEERAIYAN, JJ.
Sharma Transports -Appellant
Versus
Commissioner of Service Tax, Bangalore -Respondent
Final Order No. 533 of 2012 Appeal No. ST/1007 of 2010
Decided On : 18-07-2012
Prasanna Krishnan,R.K. Singla
M. Veeraiyan, Technical Member - This is an appeal against the order of the Commissioner of Service Tax, Bangalore No. 5/2010 (De novo) dated 12-2-2010.
2. Heard both sides.
3. The relevant facts in brief are as follows :
(a) The appellants are operating point-to-point buses for transport of passengers, providing buses on hire to companies and supplying buses for special trips.
(b) A letter dated 3-7-2002 was issued by the Superintendent of Service Tax requesting the assessee to obtain Service Tax registration and discharge the service tax for the period from 1-4-2000. The appellant filed Writ Petition No. 7414/2003 before the Hon'ble High Court of Karnataka and obtained interim order dated 13-6-2003 staying the operation of the letter dated 3-7-2002. Hon'ble High Court of Karnataka vide its order dated 22-9-2006 dismissed the above Writ Petition along with petitions by others.
(c) Consequently, a letter dated 10-10-2006 was issued to the assessee seeking records/documents which were submitted. Shri Suresh Kumar Sharma Proprietor of the firm appeared before the Central Excise authorities and given his statement on 9-4-2007.
(d) Based on the documents provided and the investigation conducted, a show-cause notice dated 20-9-2007 was issued to the assessee proposing demand of Rs. 4,93,41,151/- under the category of "Tour Operators Services" [Section 65(105)(n) of the Finance Act, 1994] for the period from 1-4-2000 to 31-3-2007 and also proposing demand of Rs. 5,49,059/- under the category of "Business Auxiliary Services" [Section 65(105)(zzzb) for the period from 2004-05 and proposing penalties under different sections.
(e) The appellant did not file reply and appear for the personal hearing on the ground that they have filed appeal before the Hon'ble Supreme Court against the judgment dated 22-9-2006 of the Hon'ble High Court. The Commissioner passed an ex parte order dated 20-11-2008.
(f) On appeal by the assessee, the Tribunal vide Final Order No. 1227/2009, dated 20-10-2009 remanded the case for fresh decision.
(g) The impugned order stands passed in pursuance of Tribunal's remand order dated 20-10-2009 confirming demand of service tax of Rs. 4,98,90,210/- along with interest and imposing penalties under sections 76, 77 & 78.
4. The learned Consultant representing the appellant challenged the impugned order on various grounds.
(a) After narrating the activities of the appellants, he submits that they were merely running point-to-point bus service with vehicles owned by them and having contract carriage permits. Such activities could not be treated as that of a tourist operator as they did not arrange, schedule/organize/control the tours undertaken by the passengers and, therefore, they could not be treated as 'tour operators'.
(b) Regarding vehicles given on hire charges to different companies, the permits for those vehicles were PSV permits which were in the name of the companies which have taken the vehicles on hire. They had no role whatsoever in the operation of vehicles at any point of time during the currency of the Agreement and the entire control was with the companies who have taken the vehicles on lease.
(c) The demand of Service Tax under the category of "Business Auxiliary Services" in respect of commission received by the appellant from other operators is not legal. The activities undertaken cannot be considered as falling under the category of "Business Auxiliary Services". At the most, such collection by them in respect of bus ticket-booking activities may be covered under the category of "Travel Agent" which came into tax net only with effect from 10-9-2004 in terms of section 65(105)(zzzx).
(d) He further submits that Notification 20/2009-S.T., dated 7th July, 2009 was issued granting exemption to :
"The taxable service referred to in sub-clause (n) of clause (105) of Section 65 of the Finance Act, provided or to be provided to any person, by a tour operator having a contract carriage permit for inter-state or intra-st
