TRAVEL AID Vs. COMMISSIONER OF SERVICE TAX

JUDGEMENT

(1.) DEMANDS of service tax under the heading 'Tour Operator Service' and imposition of penalties on these assessees have been challenged in the present batch of appeals which are, therefore, heard together and disposed of by this common order.

(2.) SERVICE tax levy was introduced on 'Tour Operator Service' on 1 -9 -1997. The levy was challenged by Chennai Tourist Taxi Owners Association before the Hon'ble Madras High Court (of which the appellants herein are members), by filing Writ Petition No. 18673/1997 and stay was granted by the High Court in WMP No. 29429, dated 16 -12 -1997. On 16.7.1998, Notification No. 58/98 -ST was issued granting exemption from payment of service tax on 'Tour Operator Service' which exemption was withdrawn on 1.4.2000. Thereafter service tax became leviable once again with effect from 1.4.2000. On 30.4.2001, the Madras High Court dismissed Writ Petition No. 18673/1997 and others, challenging the constitutional validity of the levy by upholding the validity. From May, 2001, the appellants started paying service tax and started filing returns. From 4.9.2001, the jurisdictional Superintendent of Service Tax issued letters to all tour operator service providers including the appellants herein, seeking recovery of income -tax for the period from 1.4.2000 to 30.4.2001. Aggrieved by the above, the appellants filed appeals before the Commissioner (Appeals), Chennai, who vide order dated 23.11.2001, held that the letters dated 4.9.2001 issued to the appellants by the jurisdictional Superintendent of Service Tax to all 'Tour Operator Service' providers was only a communication and not a speaking order and, therefore, no appeal was maintainable against such letters. Once again in May, 2004, the jurisdictional superintendent issued letters to all members of the Association including the appellants for recovery of service tax. For the period in dispute, namely, 1.4.2001 to 30.4.2001, similar fate befell the appeals filed by the assessees as that in the earlier order dated 23.11.2001 of the Commissioner. From June, 2005, to October, 2005 onwards, show -cause notice was issued by the jurisdictional Assistant Commissioner to several tour operators including the appellants, proposing recovery of service tax and proposing penal action. Orders -in -Original were passed by the jurisdictional Assistant Commissioner, dropping proceedings for recovery of tax and penalty, on the ground that the demands were barred by limitation, relying upon Order -in -Original Nos. 38 & 39/2005, dated 20.9.2005 in respect of M/s. Ganesh Travels and M/s. Bala Travels (these two travel companies are also members of the Association). The department accepted the above Orders -in -Appeal by not filing any appeal against them. On 31.5.2007, the Commissioner of Service Tax issued a revision notice to all tour operators and adjudicated the notice by the impugned orders, upholding the liability to service tax during the period April 2000 -01 under the provision to Section 73(1) together with interest, and imposing penalties under the provisions of Sections 76, 77 and 78 of Chapter V of the Finance Act, 1994. Hence these appeals. I have heard both sides. The finding of the Commissioner (Appeals) on limitation is contained in paragraph 10 of the impugned order which is reproduced herein below: