International Travel House Pvt Ltd Vs Commissioner of Service Tax (CESTAT Delhi)
CESTAT Delhi held that miscellaneous services rendered by air travel agent like planning travel itinerary of clients, etc. are covered within the ambit of ‘Air Travel Agent’ and cannot be classified under ‘Business Support Service’.
Facts-
The appellant is a member of International Air Transport Association (IATA) and is registered with the Service Tax Delhi-II, for rendering the services of Air Travel Agent, Rail Travel Agent, Tour Operator u/s. 65 of the Finance Act, 1994.
The appellant during the course of providing the services of ‘Air Travel Agent’ also renders certain services to its clients in the nature of planning travel itinerary of the clients, suggesting better flights and flight time options, preparing department wise travel related reports (MIS Reports) i.e., number of tickets booked, number of tickets cancelled etc. for the clients, escorting the client’s representative upto the point of immigration at airport etc.
Department demanded service tax classifying the services rendered by the appellant under the category of “Business Support Services”.
Conclusion-
Held that the definition of “Air Travel Agent” has been worded very broadly to include any service connected with the booking of passage for travel by air Therefore, any services rendered incidentally and connected with the air travel agent service cannot be covered under any other category of services. The Larger Bench in Kafila Hospitality and Travels Pvt Ltd. had observed that the definition of “air travel agent” includes all services connected with or in relation to the booking of passage for travel by air. The miscellaneous services rendered by the appellant are also in furtherance of the travel agent service to its customers and hence cannot be classified under the “Business Support Service”.
FULL TEXT OF THE CESTAT DELHI ORDER
1. Cross appeals have been filed by the appellant and also by the Revenue challenging the Order-in-Original No. DLI-SVTAX-002-COM-028-16- 17 dated 28.11.2026 passed by the Commissioner of Service Tax, Delhi-II. The appellant is aggrieved against the confirmation of demand of service tax by invoking the extended period of limitation for the period 2011–12 to 2015–16 and the revenue has filed the appeal challenging the order whereby the demand for the period 2010–2011 was dropped.
2. The appellant is a member of International Air Transport Association (IATA) and is registered with the Service Tax Delhi-II, for rendering the services of Air Travel Agent, Rail Travel Agent, Tour Operator under Section 65 of the Finance Act, 1994 (referred to as the Act). Prior to 01.04.2014, the appellant had separate registration for each of its branches throughout India and w.e.f. 01.04.2014 it is centrally registered at New Delhi.
3. That the appellant during the course of providing the services of ‘Air Travel Agent’ also renders certain services to its clients in the nature of planning travel itinerary of the clients, suggesting better flights and flight time options, preparing department wise travel related reports (MIS Reports) i.e., number of tickets booked, number of tickets cancelled etc. for the clients, escorting the client’s representative upto the point of immigration at airport etc. The appellant charges ‘management fees’ for rendering these services which is separately reflected on the air travel bill raised on the client.
4. That the appellant had discharged the service tax liability under Rule 6(7) of the Rules i.e. the value of services on the basic/commissionable fare
5. That the appellant while seeking Centralized Registration in compliance of the Trade Notice no.07/ST/2012 dated 25th April, 2012 issued by the Delhi Commissionerate mandating disclosure of all the SCN’s, pending adjudication and appeals before various appellate forums, had disclosed all issues/SCN pending adjudication before various Adjudicating Authorities and pending appeals before various appellate forums pertaining to all its branches pan-India.
6. Show cause notice no.04/2016 and 05/2016 dated 13.04.2016 was issued by the Department for the period 2010-2014 and 2014-2015 respectively classifying the services rendered by the appellant under the category of “Business Support Services” and charging service tax amounting to Rs.2,97,58,677/- for the period 2010-2011 to 2013-2014 invoking the extended period of 5 years under Section 73(1) as the service provider had intentionally avoided the disclosure of the requisite details/documents while filing the Returns though they were under the statutory obligation of self-assessment to correctly assess their liability and pay the same within the time specified. The actions of the service providers amounts to suppression of material facts from the Department resulting in contravention of the various provisions of the Act with intent to evade payment of service tax. The show cause notice was adjudicated and on the issue of invocation of extended period of limitation, the Adjudicating Authority dropped the demand raised for the period 2010-2011 as the same being beyond the period of 5 years and confirmed the service tax liability for the period 2011-2012 to 2015-2016. Being aggrieved against the demand being dropped for the year 2010-2011, the Department has filed a separate appeal and the appellant has challenged the imposition of service tax by invoking the extended period of limitation as well as on merits.
7. Ms. Madhumita Singh, learned Counsel for the appellant raised preliminary objection that the entire demand under the show cause notice is barred by limitation as the show cause notices have been issued earlier in respect of the same issue and the Department was aware of similar facts under the proceedings. The appellant had filed online ST-3 Returns from time to time disclosing the value of the services and the rate on which the liability of service tax was discharged but no objection has been raised on them. Also, while seeking centralized registration the details of the show cause notice as well as pending litigation involving in all the branches throughout India was submitted with the jurisdictional authorities at New Delhi. She referred to the contents of the show cause notice issued in the present case referring to the earlier show cause notices and relied on the decision of the Hon’ble Supreme Court in Nizam Sugar Factory Vs. Collector of Central Excise [2008 (9) STR 314 (SC)], which has been followed in subsequent decisions. Learned Counsel also submitted that the Department is itself confused in classifying the said services under two different taxable categories involving two different assessees under the same Commissionerate and thus the Department is un-clear regarding the classification of service. Consequently, no allegation of suppression of facts with intent to evade tax is sustainable.
8. Shri Rajeev Kapoor, learned Authorised Representative for the Revenue reiterated the findings of the Adjudicating Authority and submitted that the extended period of limitation has been rightly invoked in the present case as it is a case of willful suppression with intent to evade payment of service tax. On the cross appeal filed by the Revenue, the learned Authorised Representative submitted that the demand for the period 01.10.2010 to 31.03.2011 was within 5 years as the relevant date for filing periodical half-yearly return was 25.04.2011 and the show cause notice was issued on 13.04.2016 which is within 5 years.
9. Before going into the merits of the case, we would first deal with the issue of invocation of the extended period of limitation under Section 73(1) of the Finance Act, 1994. Learned Counsel for the appellant in the chronology of events have given the year-wise details of the show cause notices issued to them by the Chennai Commissionerate, which stand authenticated from the instant show cause notice, the relevant paras thereof are quoted below:-
“3.2 Whereas the assessee was issued show cause notice by the Additional Commissioner of Service Tax, Service Tax Commissionerate, MHU Complex (VI Floor), 692, Anna Salai, Nandanam, Chennai-600 035 for an amount of Rs.30,11,155/-for the period 2006-2007 to March, 2009 on the value of management fee collected under Business Support Services and for an amount of Rs.10,03,199/- for the said period against the service provided to SEZ.
3.3 Whereas for subsequent period the details of show cause notices issued to the assessee from Chennai location are as under:-
