Airline tour packages without planning/organizing tours are not "Tour Operator Services," and services provided in an airport without authorization from the airport authority (pre-July 2010) do not constitute "Airport Services."

ORDER: [PER SHRI ASHOK JINDAL]

The facts of the case are that the appellant is engaged in the business of transportation of passengers and goods via aircrafts. The appellant offers promotional schemes to its customers which includes coupons for staying in hotels and transportation of passengers to various tourist places along with other services, for a lumpsum amount. The said promotional schemes are referred to as “tour packages”.

Notification (ii) the appellant has failed to pay Service Tax under the category of “Airport Service” for the services provided to AASL. The demand was bifurcated as under: -

5.1. The matter was adjudicated and the above demand of Service Tax was confirmed against the appellant, along with interest and penalties, by way of the impugned order.

5.2. Against the said order, the appellant is before us.

6. The Ld. Counsel appearing on behalf of the appellant submits that tour packages provided by the appellant do not fall under the category of “tour operator service” as defined under Section 65(105)(n) of the Finance Act, 1994; and therefore, the demand raised under the category of “Tour Operator Service” is not sustainable in law. To support his contention, the Ld. Counsel for the appellant placed reliance on the decision of the Tribunal, New Delhi in their own case as reported in 2016 (8) TMI 1237 – CESTAT, New Delhi as well as the decision of the Tribunal, Mumbai

6. On perusal of the package features mentioned in the above Circular, it transpires that the appellant is not providing any consultancy in the nature of planning, scheduling, organizing and arranging tours on behalf of a particular tour for the passengers. Thus, the activities provided by the appellant will fall outside the scope and ambit of Tour Operator Service. We find that this Tribunal in the case of Jet Airways India Ltd. (supra) has held that various tour packages provided by the airlines to the passengers (similar to the package offered by the appellant) shall not be covered under the purview of Tour Operator Service. The relevant paragraphs in the said decision are extracted herein below.

"6.1 It can be seen from the above reproduced definition that the said definition would cover a person who is engaged in the business of planning, scheduling, organizing or arranging tours and who is engaged in the business of operating tours in tourist vehicle or a contract carriage. As already produced herein above, appellant is operating "airlines" which undertakes transportation of passengers by air. In order to enhance their business of selling airline tickets, appellant had offered "Jet Escapes Packages to their passengers for a specified destination. On perusal of "Jet Escapes Package details as downloaded from website, we find that the said advertisement specifically states that "Return air travel in Economy class, inclusive of taxes, Airport transfers, Hotel accommodation with breakfast, sightseeing as applicable" but does not indicate that they would plan, schedule or organize the tours for the passengers. Further the definition also mandates for the services to be rendered by persons engaged in business of operating tours in a tourist vehicle or a contract carriage. It is on record that the passengers when they want to opt for "Jet Escapes Package", organize own travel dates and appellant is not helping them in planning or organizing or scheduling of tours. We find that though not on the very same issue, this Bench in the case of Divisional Controller (