Customs, Excise and Services Tax Appellate Tribunal (CESTAT): The Coram of Dilip Gupta (President) and P.V. Subba Rao (Technical Member) took up an appeal which was filed by Air India to assail that part of the order by which the demand of service tax of Rs. 37,58,23,581/- has been confirmed against the total amount of service tax that was proposed in the show cause notice. It was for the reason that there was no liability pay service tax prior to 18-04-2006. The Commissioner had also ordered for recovery of interest under section 75 of the Finance Act, 1994 and penalty under Sections 76, 77 and 78 of the Finance Act.
The issue that arises for consideration in this appeal is regarding demand of service tax under the reverse charge basis on the services received from “Computer Reservation System” companies under the category of “online information and database access or retrieval” services defined under section 65 (75) of the Finance Act and made taxable under section 65(105)(zh) of the Finance Act.
The appellant claims to be a 100% government owned company engaged in the business of transportation of passengers, cargo, etc. in national and international traffic by air. It further explained the entire working of the CRS companies.
The Directorate General of Central Excise Intelligence had initiated an investigation against the appellant by alleging non-payment of service tax on reverse charge basis for payment made to CRS companies.
The Tribunal analysed on two sets of decisions in order to address the issue first being United Telecom Ltd. v. Commr. of Service Tax, 2008 (8) TMI 191- CESTAT-Bangalore wherein the appellant entered into a contract with the Government of Andhra Pradesh to build, own and operate a Wide Area Network to provide data communication services to Andhra Pradesh Technology Services Limited. The issue that arose was whether the appellant was liable to pay service tax under OIDAR. The Division Bench held that the ownership of data was relevant and since the data was generated only by Andhra Pradesh Government and the same was used by different wings of the Government, the appellant had not provided any data. Thus, the demand of service tax was not justified and second being British Airways v. Commr. of Central Excise (Adjudication), 2013 (36) STR 598 (Tri.-Del.) where the issue was whether OIDAR service was received by British Airways from foreign based CRS companies and British Airways was liable to pay service tax under reverse charge mechanism, the Division Bench after referring to the earlier decision held that the services were covered by the definition of OIDAR.
The Tribunal was of the view that there were two conflicting views of Division Benches of the Tribunal. It would, therefore, be appropriate to refer the matter to the President for constitution of a Larger Bench of the Tribunal to decide the issue.[Air India Ltd. v. Commr. (Adjudication) Service Tax, 2022 SCC OnLine CESTAT 33, decided on 08-02-2022]