Amount charged for excess baggage carried by the passengers by air craft – Prima facie taxable under “transport of goods by aircraft by an aircraft operator”

As per statutory provision under section 65(105) (zzn) of the Finance Act, 1994 taxable service means any service provided or to be provided – (zzn) to any person, by air craft operator, in relation to transport of goods by aircraft. The definition of the term “aircraft” appears in Section 65(3A) of the said Act Passenger aircraft is not excluded. The meaning of the “goods” is assigned from the term “sale” used in Sale of Goods Act, 1930.

Such adoption is made in terms of Section 65(50) of the Finance Act, 1994. We do appreciate at this stage that the goods are tangible as defined by the above Act and carried by aircraft for consideration. Once goods are carried in air by an aircraft by what ever means that may be, that does not make any difference to law. When we read Section 65(105) (zzn) that clearly throws light that taxable service provided to any person, by air craft operator, in relation to transport of goods by aircraft is covered by the scope of the law, Accordingly, we direct the appellants to make pre- deposit of Rs. 30 lakhs (Rupees thirty lakhs) within 4 weeks from today and make compliance on 29th November, 2010. Subject to compliance of the above direction, balance demand shall remain stayed during pendency of the appeal.

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST BLOCK NO.2, R K PURAM, NEW DELHI
COURT NO.II

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