Central Excise Appeal No.73 of 2008 [1]
IN THE HIGH COURT OF PUNJAB AND HARYANA
AT CHANDIGARH
Central Excise Appeal No.73 of 2008
Date of decision: 11.8.2008
Commissioner of Central Excise & Service Tax,
Commissionerate, Jalandhar (hqrs. At Chandigarh)
..Appellant.
Vs.
M/s Janta Travels (P) Limited, 10-11, Sutlej Market,
G.T. Road, Jalandhar (Pb.)
..Respondent.
CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA
HON'BLE MR. JUSTICE RAJESH BINDAL
Present: Mr. Sanjeev Kaushik, Advocate for the appellant.
..
Rajesh Bindal J.
The Revenue is in appeal before this Court against order dated
20.8.2007 passed by the Customs, Excise & Service Tax Appellate
Tribunal, New Delhi (for short, `the Tribunal) in Final Order No. 401-
402/07, raising following substantial question of law:
“Whether the Tribunal’s order is contrary to the provisions of
Rule 6(3) of the Service Tax Rules, 1994 which requires the
assessee to fulfill the following conditions for adjustment of the
excess service tax so paid:
(i)Service Tax paid has been credited to the Central
Government.
(ii)Services are not provided to the client by the assessee;
and
(ii)The value of taxable service along with service tax has
been refunded to the person from whom it was
collected.”
Briefly, the facts are that the respondent-assessee was carrying
on the business of air travel agent. The service provided by such agent was
made amenable to levy of service tax vide notification dated 26.7.1997
Central Excise Appeal No.73 of 2008 [2]
w.e.f. 1.7.1997 and an option was given to the agents to pay service tax at
the rate of 0.25% of the basic fare (upto 13.5.2003) and at the rate of 0.40%
of the basic fare from 14.5.2003 in the case of domestic tickets and in the
case of international tickets at the rate of 0.50% up to 13.5.2003 and at the
rate of 0.80% from 14.5.2003, respectively. In the other option, an assessee
can pay service tax at the rate of 5% up to 13.5.2003 and at the rate of 8%
from 14.5.2003 on the commission received from the airlines.
The dispute in the present case arose on account of the fact
noticed by the Revenue that the assessee had taken suo motu refund of
service tax of Rs. 3,17,661/- on account of service tax already paid in
respect of the tickets which were cancelled.
In appeal, the Commissioner (Appeals) upheld the order passed
by the Assessing Officer. However, the Tribunal accepted the appeal filed
by the assessee. The contention raised by the assessee before the Tribunal
was based on circular dated 26.6.1997 of the Central Board of Excise and
Customs (for short, `the Board’) and also an order passed in the case of the
assessee in Jaipur jurisdiction whereby the claim of refund/adjustment of
the service tax on the cancelled tickets was accepted by the department. It
was noticed in the circular that cancellation or modification of tickets is a
common phenomenon and frequent feature in air travel. Details of cancelled
or modified tickets are provided by a travel agent in the fortnightly returns
filed and adjustment of the commission is made subject to final approval of
the airlines. The commission is ultimately paid by the airlines on the net
commission received by a travel agent. Accordingly, no question arises for
separate claim of refund of service tax.
The contention of learned counsel for the Revenue that the
respondent-assessee should have made an application for claiming the
refund has no legs to stand, in view of the circular of the Board, as is relied
upon by the Tribunal. Further, the contention that the case was of unjust
enrichment is also misconceived for the reason that there is no material on
record to show that the amount of service tax was charged from any
customer. In fact, such an argument could not possibly be raised for the
reason that once the ticket booked by a passenger is cancelled, there was no
question of payment of even the fare, what to talk of service tax thereon.
Central Excise Appeal No.73 of 2008 [3]
The finding recorded by the Tribunal is in conformity with the law.
No substantial question of law arises in the present appeal.
The appeal is dismissed.
( Rajesh Bindal)
Judge
(Hemant Gupta)
Judge
11.8.2008
mk