United Tours And Travels Vs Commissioner of Central Excise & CGST (CESTAT Allahabad)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, allowed the appeal filed by the assessee and set aside the Order-in-Appeal dated 19.06.2025, which had confirmed a service tax demand, interest, and penalty under the Finance Act, 1994. The dispute arose from a comparison of information received from the Income Tax Department for the financial year 2016-17 with the details disclosed by the appellant in its ST-3 returns. The appellant, engaged in providing tour operator and air travel agent services, had reported a gross value of services of Rs. 1,52,100 in ST-3 returns, whereas sales of services shown in the Income Tax Return amounted to Rs. 6,08,75,938. Based on this discrepancy, the Department alleged short payment of service tax and issued a show cause notice dated 08.10.2021 invoking the extended period of limitation. The notice proposed recovery of service tax, interest, and penalties under Sections 78 and 77 of the Finance Act, 1994.
The adjudicating authority partly confirmed the demand and imposed interest and penalties. On appeal, the Commissioner (Appeals) reworked the tax liability. The appellate authority examined receipts from sales of air tickets, Umrah tickets, and Haj pilgrims. While allowing deduction of air fare amounts in relation to Umrah services and treating the appellant as an agent for that portion, the Commissioner (Appeals) held that the appellant was liable to service tax on the balance value relating to Umrah services. With regard to Haj receipts, the Commissioner (Appeals) concluded that the appellant acted as a tour operator because amounts were collected as package charges along with service charges and therefore confirmed service tax liability on those receipts. The penalty under Section 77(1)(c) was, however, set aside on the ground that the appellant had replied to the show cause notice and participated in personal hearings.
