ST - Applicants charge for arranging tour of sanctuary by vehicles - since they are engaged in business of planning, organizing tours, therefore, prima facie, they are liable to pay ST - Pre-deposit ordered: CESTAT
By TIOL News Service
NEW DELHI, JULY 30, 2013: THE appellant in this case are the Deputy Conservator of Forest & Deputy Field Director, Rajasthan.
Against them a Service Tax demand of Rs.1.56 Crores has been confirmed by the CCE, Jaipur and, therefore, they are in the urban forest with a Stay application filed before the CESTAT.
The service tax demand is made on the ground that the applicant provided tour operator service and had not paid service tax for the period from 1.4.2004 to 31.3.2010. Two show cause notices were issued for demanding duty and for penalty. The adjudicating authority confirmed the demand along with interest. In respect of first SCN, the CCE, Jaipur allowed the benefit of section 80 of Finance Act, 1994 and had not imposed any penalty. However, the same was not the case in the second SCN and penalty under section 76 & 77 was imposed.
It is the submission of the applicant that they come under the jurisdiction of Department of Forest, Government of Rajasthan and that they are not organising or arranging tours. However, the applicant is only organizing only entry of the tourists so that environmental condition is maintained. The applicants are receiving charges from tourist who want to enter in the park and have engaged various types of vehicles on rental basis. In the circumstances, it cannot be said that the applicant is tour operator. The contention is that the scope tour service as provided in the Motor Vehicle Act requires that they must be in the business of planning, arranging of tour or any mode of transportation.
It is further submitted that the main function of the applicant is to preserve equal balance of Ranthambore National Park and the applicant is not in any way concerned in engaging in the business of tour and hence demand is not sustainable. The applicant also submitted that prior to 1.10.2008 Rajasthan Tourism Development Corporation was undertaking operation in respect of regularising visitors to the park. In the circumstances the demand prior to 1.10.2008 is not sustainable as the activity was conducted by Rajasthan Tourism Development Corporation. The applicant also submitted that they are also entitled for abatement as provided under Notification No.1/06-ST to the extent of 60%.
The Revenue representative submitted that the demand has been correctly confirmed since the applicants are covered under the scope of "tour operator" and furthermore the benefit of notification had not been claimed before the lower authorities.
The Bench observed -
"7. We find that the applicants are arranging tour for sanctuary by various types of vehicles. They are charging certain amount such as Rs.330/- per person for petrol canter, Rs.300/- per person for diesel canter and Rs.1980/- for gypsy vehicle per trip for six persons. As per the provisions & Sections 65(115) of Finance Act, 1994, "tour operator" means person engaged in the business of planning, scheduling, organizing or arranging tours by any mode of transport and includes any person in the business of operating tours in a tourist vehicle covered by a permit, granted under Motor Vehicles. In the present case, the applicants are engaged in the business of planning, scheduling, organizing or arranging tours for the Ranthambore National Park. Therefore, prima facie, we find no merit in the contention of the applicant that they are not providing tour operator service. The contention of the applicant is that prior to 1.10.2008, Rajasthan Tourism Development Corporation was undertaking operation in respect of regularising visitors to the park it was only with effect from 1.10.2008, the applicant was undertaking the activity. In the circumstances, the demand after 1.10.2008 comes approximately to Rs.43 lakhs. The benefit of notification No.1/2006 now claimed by the applicant was not claimed before the lower authority. Therefore, contention of the applicant regarding eligibility of notification has not gone by the adjudicating authority. We are now at the stay stage, therefore aspect of benefit of notification will be gone at the time of regular hearing. Keeping in view the facts and circumstances of the case and the issue raised in respect of time bar, we direct the applicant to deposit Rs.25 lakhs (Rupees Twenty five lakhs) within eight weeks in both the stay petitions…."
In passing: The Board should enquire as to what's happening in the other sanctuaries?
(See 2013-TIOL-1144-CESTAT-DEL)
