S.S. Garg, Judicial Member.
1. The appellant have filed these two appeals against the common impugned order dated 24/12/2013 passed by the Commissioner, whereby the Commissioner has confirmed the demand by classifying the services rendered by the appellant under ‘business auxiliary service’. The Commissioner confirmed the demand of service tax of Rs. 86,32,333/- for the period 2004-05 to 2011 along with interest thereon and also imposed penalties under various provisions of Finance Act, 1994 against the appellant M/s Akbar Travels of India Pvt. Ltd. Since the issue involved in both the appeals are identical, therefore, both the appeals are being disposed off by this common order.2. Briefly, the facts of the case are that the appellant is engaged in rendering of services as ‘air travel agent’ and registered under the category of ‘air travel agent services’. The appellant received commission from General Sales Agent (GSA) on account of sale of air tickets by GSAs of certain airlines to the persons rendered by the appellant to GSA. The appellant approached GSA for booking of the tickets which is issued directly in the name of passenger. Service tax is charged by the GSA on such tickets booked by him. The invoices issued in the name of the appellant for the reason that the GSA was not interacting directly with the passenger. GSA issues the ticket and pays the service tax on the booking of the ticket. The appellant approached the GSA for booking of the tickets which is issued directly in the name of passenger. GSA issues the ticket and pays the service tax on the booking of the tickets. The appellant raises invoices to the customers for the sale of tickets. The difference in the amount charged by the GSA to the appellant and the appellant to the customer is the commission earned by the appellant. The appellant did not pay the service tax on the said commission based on the contention that the services are appropriately classified under ‘air travel agent services’ and exempt under notification No. 22/1997 -ST dated 26/06/1997 and the service tax has already been discharged by GSA on the sale of tickets. Based on the investigation that the appellant is not paying service tax on the e commission, the DGCEI initiated investigation. After the investigation show cause notice dated 15/10/2009 was issued to the appellant proposing demand of service tax on the commission earned by them under ‘business auxiliary service’ in terms of sub-section 19 read with sub-section (105) (zzb) under section 65 of the Act, read with section 66. The appellant contested the demand by filing the reply to the show cause notice alleging that the services provided by the appellant are taxable under ‘air travel agency services’ the services shall be exempted under notification 22/1997. Further, the commission value has already been suffered service tax and the same cannot be taxed twice. Further that, they are not taxable services when tickets are issued by the branches of the appellant.
3. After considering the submissions, the adjudicating authority confirmed the demand along with interest and also imposed penalty under various provisions. Hence the present appeals.
4. Heard both the sides and perused the records.
5. Learned Counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without considering the facts and the law. He further submitted that the impugned order is contrary to binding judicial pronouncements. He further submitted that the appellant is acting as an air-travel agent and when the customer comes for booking of passage by air, they purchase the tickets from the airlines and given to the customers and on the agency charges they discharged service tax liability under the category of ‘air travel agency services’. In respect of smaller airlines, sometime they purchase the tickets from the GSA of the concerned airlines but issue tickets in the name of traveller and hands over the tickets to the appellant for further handing over to the airline travellers. On the entire commission, the GSA discharges service tax liability and part of the commission is given to the appellant. The part of the commission so received is given to the travelers by way of reduction of the price of the tickets. He further submitted that the department seeks to levy service tax on the commission given to them by the GSA (on which service tax liability has already been discharged) under the category of ‘business auxiliary service’. It is his further submission that the liability to service tax under ‘air travel agent services’ has been discharged by GSA and, therefore, subjecting the same once again to service tax under the category of ‘business auxiliary service’ does not arise. In support of this submission he relied upon the decision of this Tribunal in the case of Commissioner of Central Excise, Goa v. Zuari Travel Corporation [Appeal No. ST/309/2006 Order No. A/1716/13/CSTB] wherein on identical facts, the Division Bench of this Tribunal has held
'5. 3 In the case of Airlines Agents Association (supra), a question arose before the Hon'ble High Court of Madras was as to whether the services rendered by GSA/IATA agent is the services rendered to the Airlines or is it the services rendered to a customer and the Hon'ble High Court held as follows: -
'16.In our opinion, the observations made in Buxa Dooars Tea Co. Ltd. case, cited supra, and more particularly those in paragraph 11 thereof cannot be read out of context. The situation regarding the levy and the measure of the tax was entirely different. It was found as a fact that the measure of the tax had no nexus with levy therein. In our case, however, such is not the position. We have already shown that the ‘measure of the tax’ provided by Section 67(k) cannot be said to be totally connected with the services offered by the air travel agents which is the main subject of tax. Therefore, we hold that the observations in Buxa Dooars case, cited supra, in paragraph 11 which have been quoted by us would not be applicable to the present situation. This is apart from the fact that the observations in paragraphs 10 and 11 of the Buxa Dooars case were not approved by the Supreme Court in Goodricke Group Ltd. case, cited supra, was entirely different but, that is a different subject altogether. We have already held that Section 67(k) which provides the ‘measure of the tax’ is not unconnected with the main levy of the tax for the reasons that we have already given above.
17. We have already shown here that the provision of Section 67(k) does not in any manner alter the nature of tax and does not shift it from the service rendered to the customer to the service rendered to the airlines. The contention, therefore, is clearly incorrect on facts.
18. The further argument that the notification dated 26/06/1997 restricts the tax to the commission alone is repugnant to the scheme of the tax is obviously incorrect for the reasons given by us. The basis of the argument that the commission received from the airlines by the air travel agent is taken a measure for imposing a levy on a different service rendered to the customer by the agent is itself incorrect. We, therefore, reject the argument that the impugned provision of Section 67(k) is repugnant to the general scheme of the Act and, therefore, it should fail or that there is anything repugnant in that provisions and the definition clause as also Section 67(k) which is a charging provision.'
5.4 In our considered view, the question before us is also identical. The activity undertaken by respondent herein, who is a sub-agent of the IATA agent comes under ‘Air Travel Agents Services’ or ‘Business Auxiliary Services’. The ratio of the decision of the Hon'ble High Court of Madras in the case of Airlines Agents Association (supra) would squarely apply to the facts of the present case. If the services rendered by the IATA agent is ‘Air Travel Agents Services’, the services rendered by a sub-agent is also the same and it cannot be different from that if ‘Air Travel Agents Services’. In fact, the case laws relied upon by the Revenue do not support the case of the Revenue at all. In the Sew Construction Ltd. case (supra), the issue for consideration was whether sub-contractor is liable to pay Service Tax for the services rendered to the contractor and it was held that sub-contractor is liable to pay Service Tax and the classification of the service rendered by the sub-contractor is not different and remains the same as services rendered by the contractor. Similarly, in the case of Vijay Sharma (supra), the question was whether broker or the sub-broker is liable to pay Service Tax. In that case it was held that sub-broker is liable to pay Service Tax under ‘Business Auxiliary Services’. The same logic was followed in the case of Indfos Industries Ltd. (supra). From these decisions also, it is obvious that classification of the services rendered by the sub-broker or sub-agent remains the same as that of main broker.'
6. He further relied upon the decision of the Tribunal in the case of Amar Travels India v. Commissioner of Service Tax, Deli 2010 (10) TIMI 505-CESTAT NEW DELHI wherein also the Tribunal has held that demand on service tax under the category of ‘business auxiliary service’ cannot be sustained and the same was set aside. Further, he also submitted that the classification shall be preferred under the specific category rather than the general category. He also referred to the Circular issued by the Board vide Circular No 59/8/2003-ST dated 20/06/2003 wherein it has been clarified that if there is specific category available, the service would be classified under the specific category and not under general category. He further submitted that the Commissioner has not given any finding on the applicability of the said circular which is binding on him.
7. On the other hand Learned Authorised Representative appearing for Revenue reiterates the findings of the lower adjudicating authority and submits that since the appellant is getting commission from GSA, it is promoting the business of GSA and therefore, the services rendered is rightly classified under ‘business auxiliary service’.
8. After considering the submission of both the sides and perusing the appeals records and various judgments relied upon by the appellant, we find that the services rendered by the appellant it booking of passes for travel by air which is squarely covered by the definition of ‘air trave
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l agency service’ as defined under Section 65(105). As per the said definition of ‘air travel agent’ means ‘any person engaged in providing any service connected with the booking of passage for travel by air’ and the taxable service means ‘any service provided or to be provided to any person by an air travel agent in relation to the booking of passage for travel by air’ 9. In view of the statutory definition, any activity in relation to booking of passes by air travel agent would be covered under ‘air travel agency services’. Whether the ticket is bought directly from the airline or through the GSA the same would not make any difference. 10. Further, we find that this issue is squarely covered in favour of the appellant by the Division Bench decision in the case of Zuari Travel Corporation (supra).11. By following the ratio of the above said decision we are of the considered view that the impugned order classifying the service under ‘business auxiliary service’ is not sustainable in law and therefore we set aside the impugned order and allow the appeals of the appellant with consequential relief, if any.