M/S Rajasthan Tourism ... vs Principal Commissioner Of ...
2022 Latest Caselaw 1371 Raj/2

       HIGH COURT OF JUDICATURE FOR RAJASTHAN
                   BENCH AT JAIPUR

              D.B. Central/excise Appeal No. 1/2021

M/s Rajasthan Tourism Development Corporation Ltd., Parytan
Bhawan,    Government         Hostal       Campus         M.i.   Road,   Jaipur,
(Presently Address At Paryatan Bhawan, Sanjay Marg, Khasa
Kothi, Jaipur) Through Authorised Signatory Sh. Kamal Sharma
S/o B.d. Sharma Aged About 53 Years, Currently Posted As
Junior Accountant, Palace On Wheels, Jaipur
                                                                   ----Appellant
                                   Versus
Principal Commissioner Of Central Goods And Services Tax,
Commissionerate Jaipur, Ncr Building, Statue Circle, C-Scheme,
Jaipur- 302005
                                                                 ----Respondent

For Appellant(s)         :     Mr. Daksh Pareek with
                               Mr. Arjun Singh through VC
For Respondent(s)        :     Mr. Kinshuk Jain through VC

HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SUDESH BANSAL

Judgment

08/02/2022

This appeal is filed by the Rajasthan Tourism Development

Corporation (for short 'RTDC') to challenge the judgment of

Customs, Excise and Service Tax Appellate Tribunal (for short

'CESTAT'). Following question is presented for our consideration:-

"Whether the Government company formed with the object of developing tourism and infrastructure related to it and running "Palace on Wheels" can be charged of rendering business auxiliary service on account of realizing felicitation fee from the empaneled showrooms/Emporia's, which was required for avoiding fraud, cheating, and to protect the foreign and domestic tourist?"

(2 of 3) [EXCIA-1/2021]

Brief facts are that the appellant is a state tourism

corporation and engaged in tourism development in the State.

One of the premier project of the assessee is a luxury train called

palace on wheels which attracts many foreign tourists. The

tourists are taken to different tourist attraction places in the train

which contains several luxurious coaches. The tourists are also

taken for sightseeing by the bus whereever it is necessary.

The corporation first invited tenders and then entered into

agreements with shop owners whose shops are located enroute

the bus journey of these tourists. As per agreement the shop

owners would pay to the corporation facilitation charges for

tourists season on the corporation promising the shop owners that

the RTDC buses carrying tourists of palace on wheels would be

stopped at these shops.

The respondent-department was of the opinion that this

amounted to the providing service and would therefore fall within

the definition of business auxiliary service on which service tax

would be payable. The assessing officer not only charged the

service tax but also invoked the extended period of limitation. The

tribunal by the impugned judgment upheld the levy but struck

down the invocation of extended period of limitation. Against this

order of CESTAT to the extent it is against the appellant-

corporation this appeal has been filed.

Learned counsel for the appellant submitted that the

arrangement was made by the corporation with private shop

owners principally for providing reliable shopping avenues to the

foreign tourists. It was not for the purpose of developing a

business of the shop owners. Token charges were collected for this

purpose.

(3 of 3) [EXCIA-1/2021]

On the other hand, learned counsel for the department drew

our attention to the agreements between the assessee and the

shop owners and argued that the definition of term business

auxiliary services is wide enough to include the transaction in

question.

Having heard learned counsel for the parties and having

perused the documents on record we find that the term business

auxiliary service has been defined in Section 65 (19) of the

Finance Act, 1994 as to mean, besides others, promotion for

marketing or sale of goods produced or provided by or belonging

to the client. The tribunal assessed the factual situation and came

to the conclusion that the activity amounted to marketing of the

goods for sale. We are broadly in agreement with the view of the

tribunal. The agreement between the shop owners and the

assessee provided that the shop owner would pay facilitation fees

per season to the corporation on the condition that the tourist

buses of the corporation would stop at the showroom of the shop

owners for the purpose of shopping by the tourist travelling in

palace on wheels. It was thus a clear case of promotion of sale of

the goods of the shop owners or the showroom owners, as the

case may be.

No question of law arises. The appeal is dismissed.

                                    (SUDESH BANSAL),J                                              (AKIL KURESHI),CJ

                                   N.Gandhi/62









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