Service tax under Tour Operators category when appellant neither held tourist permits nor had tourist buses. When service tax paid was by other tour operator, can it be demanded second time on same activity?

Appellant was providing following services against consideration:
• Bus Reservation agreement (BRA) – wherein Appellant supplied ordinary buses (other than tourist vehicles) to other tour operators and non-commercial concerns on rent.
• Seat Reservation agreement (SRA).
• Nashik Darshan (ND).
• Tour extension (TE).

 Respondent issued SCN demanding service tax of Rs. 1,03,65,342/- on BRA from 01-04-2001 to 31-03- 2006 and on other services from 01-04-2001 to 09-09-2004 under the category of “tour operator” and equal amount of penalty u/s. 78 was imposed. Appellant contended that they provided buses on rent to IDTC who was a tour operator and IDTC discharged the service tax under the category of “tour operator” and hence service tax cannot be demanded twice on the same activity.

Held:

Since appellant was neither holding tourist permits nor having tourist vehicles, they are not subject to service tax in respect of all activities concerned till 09-09-2004. Appellant was not liable for service tax on BRA where buses were hired to IDTC and service tax was paid by IDTC. However where buses were hired to non-commercial concerns like schools etc., appellant was liable to pay service tax from 09-09-2004. Held, penalty imposed u/s. 78 was waived as issue involved was of interpretation of law.