COMMISSIONER CENTRAL EXCISE Vs. COCHIN INTERNATIONAL AIRPORT LTD

JUDGEMENT

(1.) These connected appeals are filed by the Central Excise and Service Tax Department challenging the orders of the Customs, Excise and Service Tax Appellate Tribunal vacating the service tax demands on the Respondent on the royalty charge collected from M/s. Air India Ltd., for ground handling entrusted to them, charges collected from M/s. Thomas Cook for providing space for operating foreign exchange facilities, charges collected from M/s. Atlas Jewellery for providing space for running the duty-free gold sale shop, etc. We have heard standing counsel Sri John Varghese appearing for the Appellant and have gone through the orders of the Tribunal.

(2.) The first question raised pertains to the Appellant's demands against the Kochi International Airport Authority Limited for service tax on the royalty received from M/s. Air India Ltd. The Tribunal, after going through the agreement between the Respondent and M/s. Air India, found that M/s. Air India Ltd., is entrusted with ground handling services, including passenger handling, ramp handling, cargo flight handling on ramp including loading of the cargo, etc.

(3.) The arrangement between M/s. Air India Ltd. and Respondent is that M/s. Air India Ltd., will collect charges from other airlines for the services rendered and on the entire collections M/s. Air India Ltd., will collect and remit applicable service tax to the Government. Certificate from M/s. Air India Ltd., is referred to in Tribunal's order wherein it is stated that M/s. Air India Ltd., is remitting service tax on the entire collections made by them. What is paid to the Respondent by M/s. Air India Ltd., towards royalty is 18.5 per cent of the gross receipts collected by them for services rendered on which service tax was already collected and remitted by M/s. Air India Ltd. Since the Tribunal found that royalty collected by Respondent from M/s. Air India Ltd., is part of the charges collected by them on which service tax is collected and remitted by M/s. Air India Ltd., the Tribunal rightly held that the Respondent is not rendering any service to M/s. Air India Ltd., for the royalty paid by them and so much so, there is no scope for levy of service tax on the royalty paid by M/s. Air India Ltd., to the Respondent, which is part of the value of taxable service on which M/s. Air India Ltd., has paid service tax.