Blue Hills Travels (India) Limited. Vs Commr. of Customs (CESTAT Kolkata)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata, adjudicated an appeal concerning a service tax demand raised on a tour operator for the period 2008–09 to 2012–13. The appellant was registered under Service Tax for providing Tour Operator Services and had been regularly filing ST-3 returns and paying tax under that category. A show cause notice (SCN) dated 18.10.2013 alleged that the appellant had also rendered services under the category of Business Auxiliary Services (BAS) in relation to tourist buses, stage carriage buses, and goods and luggage booking.
The adjudicating authority initially dropped the proceedings, holding that the appellant was only providing Tour Operator Services and not BAS. However, on appeal by the department, the Commissioner (Appeals) reversed this finding and confirmed a demand of ₹18,14,889 along with interest and penalties. The appellant challenged this order before the Tribunal.
The appellant argued that its activities involved selling tickets and retaining a portion of the fare under a profit-sharing arrangement, and that passengers could not be treated as clients. It was also contended that there was no agreement indicating that the appellant acted on behalf of bus operators for commission, and the department had not produced evidence to establish such a relationship. The appellant further argued that the Commissioner (Appeals) went beyond the scope of the SCN by relying on provisions relating to the negative list and exemptions introduced from 01.07.2012, which were not part of the original notice and were not applicable for most of the period in dispute.
