DELHI INTERNATIONAL AIRPORT LIMITED Versus CGST-DELHI III
Service Tax
2019 (1) TMI 979 – CESTAT NEW DELHI – 2019 (24) G. S. T. L. 37 (Tri. – Del.) , [2019] 68 G S.T.R. 313 (CESTAT – New Delhi)
CESTAT NEW DELHI – AT
Dated:- 18-1-2019
Appeal No. ST\/52815\/2016-CUS [DB] – FINAL ORDER NO. 50064\/2019
Service Tax
Shri Anil Choudhary, Member (Judicial) And Shri C.L. Mahar, Member (Technical)
\nShri Somesh Arora, A.S. Hasija, Advocate for the Appellants
\nShri Amresh Jain, AR for the Respondent
\nORDER
\nPer Anil Choudhary:
\n1. The issue in this Appeal is whether service tax have rightly been levied on 'Development Fee', collected by the appellant, from the passengers at IGI Airport.
\n2. M\/s Delhi International Airport Limited w.e.f 10.04.2017 (hereinafter Appellant) has filed the present appeal against the Order-In-Original No. DLI-SVTAX-003-COM-56-15-16 dated 12.07.2016 passed by the Commissioner of Service Tax, Delhi-III (Adjudicating Authority). Vide the impugned order <\/p>\n
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Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ting, upgrading, modernizing, financing and managing IGI Airport and to perform services and activities constituting Aeronautical and Non-Aeronautical services (excluding the Reserved Activities) at the IGI Airport. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he “ad hoc” approval granted was subject to submission of final project cost estimates. The said approval; for levy of DF was allowed based on appellant's request to bridge funding gap of the project cost through DF. The appellant vide its letter dated 09.03.2009 intimated the Commissioner of Service Tax, New Delhi that levy of DF is in the nature of statutory levy to fund a public purpose and not towards rendition of any service per se. That the DF is not in connection with provision of taxable service, and hence not subject of levy of Service Tax. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n g) = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n nger during the period of levy of 'development fee.' These are basic facilities that is inherent in the civil aviation sector in which the appellant, a non-public sector entity, is a recent entrant. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ts of the Authority. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n purpose. We cannot agree with this contention because the Hon'ble Supreme Court in the very same decision has directed that the amount so collected should necessarily be used only for the purpose intended in Section 22A of the Act. In that context, the attempt by Revenue to cite intention of the two parties by reference to Bharat Sanchar Nigam Ltd. supra as germane to delinking it from tax is rendered irrelevant. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n of taxable services for charging service tax says that the value of service shall be gross amount charged by the service provider for the service provided to the recipient. Since collection of users fee is not for any specific service rendered by them, but is a flat rate of charge to one category of passengers namely, outgoing international passengers, it cannot be said that the amount so collected is by way of service charge. We, therefore, hold that the Tribunal rightly held that no service tax is payable for the users fee collected by the respondent. The appeals are accordingly dismissed.” = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" DELHI INTERNATIONAL AIRPORT LIMITED Versus CGST-DELHI IIIService Tax2019 (1) TMI 979 – CESTAT NEW DELHI – 2019 (24) G. S. T. L. 37 (Tri. – Del.) , [2019] 68 G S.T.R. 313 (CESTAT – New Delhi)CESTAT NEW DELHI – ATDated:- 18-1-2019Appeal No. ST\/52815\/2016-CUS [DB] – FINAL ORDER NO. 50064\/2019Service TaxShri Anil Choudhary, Member (Judicial) And … Continue reading “DELHI INTERNATIONAL AIRPORT LIMITED Versus CGST-DELHI III”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-16249","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16249"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16249\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\n4. As per the OMDA the appellant has been granted the exclusive right in respect of IGI Airport inter alia to develop, finance, design, construct, modernize, operate, maintain, use and regulate the use by third parties of the airport and to enjoy complete and uninterrupted possession and control of the airport site and the existing assets for a period of 30 years (with an option to extend it by another 30 years).
\n5. As per the terms of OMDA, the appellant was granted the right to determine, demand, collect, retain and appropriate charges from the users of Airport which will be in the nature of aeronautical charges, charges for non-aeronautical services and Passenger Service Fee. The aeronautical charges are levied by the appellant at IGI Airport for provision of Aeronauti<\/p>\n
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\n7. The adjudicating Authority adjudicated the aforementioned Show Cause Notices vide the common impugned order wherein demand of Rs. 262,06,24,787\/- was confirmed under Proviso to Section 73(1) of Finance act, 1994. An amount of Rs. 130,17,48,797\/- already deposited by the appellant under protest, was appropriated, interest under Section 75 of Finance Act, 1994 demanded and penalties under Section 78 and 76 of the Act ibid, were imposed. H<\/p>\n
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\niii. Commissioner of Central Excise v. Cochin International Airport Ltd-2009 (16) STR 401 (Ker)
\n10. Learned DR supported the impugned order contending that in the impugned order the appellant as well as the passengers did not entertain the idea that they were collecting or paying a tax when transacting in the development fee and thereby seeking to counter the plea on behalf of the appellant, that this levy should have the status of a tax.
\n11. We find that identical issue has been dealt with by the co-ordinate bench of Mumbai Tribunal in the case of Mumbai International Airport P. Ltd. Vs Commr. Of ST-I, Mumbai-2017 (51) STR 280 (Tri-Mumbai) as under:-
\n“8. The tax authorized to be collected as per Section 65(105)(zzm) of Finance Act, 1994 after 1st July, 2010 is on service :
\n“to any person, by airport authority or any other person, in any airport or a civil enclave”
\nfor the period prior to that was :
\n“to any person, by airports authority or any person authorized by it, in<\/p>\n
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\n10.Civil aviation sector in India was, for long, under the monopoly of the Government of India with carriage effected by two corporations established by Acts of Parliament and the 'ground facilities' under the control of the Ministry of Civil Aviation. Air carriage was de-nationalised first and, in keeping with the evolving trend of autonomy for infrastructure sector, management of airports were consolidated under a single authority with the enactment of the Airports Authority of India Act, 1994. Later on, airport operators were brought into the legislative framework by incorporation of leasing mechanism. The appellant is one such.
\n11.Owing to this transition from being a departmental undertaking of the Government to an authority with consequent financial independence but at the same ti<\/p>\n
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\n12.Section 22 of the Act enables the airport authority to charge users of its facilities. We have noted supra that this provision was never invoked for passengers and payments were restricted to and only upon exercise of option to procure food and non-food articles from licencees situated in the airport premises. On the other hand, the levy under Section 22A of the Act did not afford the privilege of exercise of an option by the passenger and enforced, without consent of the passenger, through the airlines on the basis of passenger data furnished by them on a fortnightly basis. The amounts so collected were placed in an escrow account owing to the restricted scope of expenditure being specifically enumerated in Section 22A of the Act. There is, therefore, a substantive difference between a charge under Section 22 and levy under Section 22A. It could well be said that charge under Section 22 if visited upon a passenger would be a consideration for a service. Such <\/p>\n
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\n15.The decision of the Tribunal in Cochin International Airport Ltd. v. Commissioner of Central Excise & Customs, Kochi-2007 (7) STR 468 (Tri-Bang) affirmed by the Hon'ble High Court of Kerala- 2009 (16) STR 401 (Ker) and by the Hon'ble Supreme Court-2010 (17) STR J79 (SC) has again clarified that the 'development fee' is not linked to provision of service and hence not liable to service tax. The Hon'ble High Court of Kerala had observed thus :
\n“… … … Even though Airport is also rendering services to the passengers like restaurants, air-conditioning, facility for fo<\/p>\n
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\n12. We in complete agreement with the conclusion arrived at hold that the ratio of the above said judgment squarely covers the case in hand. We find no reason or occasion to differ with the same. In view of the above and the definition of 'airport services' in Section 65(105) (zzm), we hold that service tax is not chargeable on Development Fee. Accordingly we find that the impugned order is not<\/p>\n
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