Bharat Hotels Ltd. vs Commissioner of C. Ex., Cus. & S.T.

The learned counsel for the petitioner submits that the service provided by them is "Transportation of Passengers by Air Services". However, the department insists that the service provided by the petitioner falls in the category of "Supply of Tangible Goods for use". He further submits that whether the petitioner is right or the department is right is a matter which has to be decided and is pending adjudication. The fact of the matter is that it is either one of the two services that would apply. The petitioner has remitted an amount of Rs. 1,04,96,924/- as Service Tax under the category of "Transportation of Passengers by Air Services". The Tribunal has refused to give credit to the petitioner for this deposit under the provisions of Section 35 of the Central Excise Act, 1944 on the ground that the tax has been paid for a category different for which the department has raised the demand.

The submission of the learned counsel for the petitioner is that it has to be decided as to which category is the relevant category.

Be that as it may, in either eventuality, respondents ought to give the petitioner credit for the Service Tax amount of Rs. 1,04,96,924/-. We feel that the petitioner has a prima facie case. As a result, we are issuing notice and directing that the petitioner need not deposit 7.5% in the category of "Supply of Tangible Goods for use" and that its appeal shall not be rejected by the Tribunal on the ground that the petitioner has not deposited the amount in the said category. The notice is returnable on 18-1-2016.