Hi Tour Mamallapuram Pvt Ltd vs PONDICHERRY

Court
Customs, Excise and Service Tax Appellate Tribunal

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
CHENNAI
REGIONAL BENCH - COURT No. I

Service Tax Appeal No. 41946 of 2017
(Arising out of Order-in Appeal No.277/2017 (CXAPII), dated 31.05.2017 passed by the
Commissioner of Central Excise (Appeals _ II), 26/1, Mahatma Gandhi Marg,
Nungambakkam, Chennai 600 034).


M/s. Hi Tour Mamallapuram Private Limited ...Appellant
No.123, East Raja Street
Mamallapuram 603 104

Versus

Commissioner of GST & Central Excise ...Respondent
Puducherry Commissionerate
No.1, Goubert Avenue
Beach Road, Pondicherry 605 001


APPEARANCE:
For the Appellant :Mr. Harihara Kumar A.S., Consultant for the Appellant
For the Respondent: Ms. K. Vijaya Sree, Authorised Representative

CORAM :
HON’BLE MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL)
HON’BLE MR. AJAYAN T.V. MEMBER (JUDICIAL)


FINAL ORDER No.41144/2026

DATE OF HEARING :03.07.2026
DATE OF DECISION: 29.10.2026
Per AJAYAN T.V.

M/s. Hitour Mamallapuram Private Limited, the appellant herein
assails the Order in Appeal No.277/2017 CXA – II, dated 31.05.2017
(the impugned order), passed by the Commissioner of Central Excise,
(Appeals – II) (the Appellate Authority), whereby the appellant’s appeal
against the Order in Original No. 49/2016 – (ST), dated 30.11.2016

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passed by the Deputy Commissioner of Central Excise, Villupuram
Division (the Adjudicating Authority) was rejected.

2. The relevant facts are that the appellant is registered as a
provider of ‘Tour Operator” service. During the verification of the
appellant’s records, the Department observed that for the period from
October 2014 to March 2015, the appellant had booked air tickets for
their clients by raising invoices in which it is shown as ‘Sale of Air
tickets’. The Department was of the view that booking air tickets for
their customers was a taxable service and the amount collected in this
regard is liable to be included in the taxable value of the services
provided by the appellant. Noticing that the value adopted by the
appellant for paying service tax is at variance with the invoice value, the
Department issued a Show Cause Notice dated 13.06.2016 proposing to
demand the short paid service tax along with appropriate interest and
proposing imposition of penalty under Section 76 of the Finance Act,
1994. After due process of law, the Adjudicating Authority confirmed
the demand along with appropriate interest and imposed penalty as
proposed. Aggrieved, the appellant preferred an appeal which came to
be rejected vide the impugned order whereby the Appellate Authority
upheld the order of the Adjudicating Authority in toto. Hence this
appeal.

3. Shri Harihara Kumar, Ld. Consultant appearing for the appellant
contended that the dispute pertains to the trading of air tickets as
brought from travel agents and sold to the customers, with or without
profit, and same did not include any other activities other than mere
selling of air tickets. It is further submitted that the issue is settled in
the appellant’s favour by various Final Orders of this Tribunal in the
appellant’s own case and filed copies of the Final Order No.40738/2023,
dated 31.08.2023, Final Order No.40938/2023 dated 13.10.2023, Final
Order No.40485/2025 dated 02.05.2025, Final Order No.40582/2026
dated 07.05.2026 and Final Order No.40651/2026, dated 29.05.2026.

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4. Ms. K. Vijaya Sree, Ld. Authorised Representative appearing for the
Revenue reiterated the findings of the Appellate Authority in the
impugned order.

5. We have heard both sides and perused the material available on
records.

6. The singular issue that arises for out determination is whether the
appellant is liable to include value of air tickets in the taxable value of
the services that being rendered by the appellant.

7. We find that the issue involved in this appeal stands decided by this
Tribunal in the appellant’s favour in their own prior disputes vide the
following Final Orders.
Final Order No.40943/2014, dated 31.08.2023
Final Order No.40938/2023, dated 13.10.2023
Final Order No.40485/2025, dated 02.05.2025
Final Order No.40582/2026, dated 07.05.2026
Final Order No.40651/2026, dated 29.05.2026

The relevant extracts from Final Order No.40582/2026 dated
7.5.2026 is as under:
“7. The only issue that arises for our consideration is whether the
Appellant is liable to include the value of air tickets / train tickets
charges in the taxable value of Tour Operator Service that is being
rendered by the Appellant.

8. We find that in the Appellant’s own case, this Tribunal, vide its
Final Order No.40485/2025 dated 02.05.2025 has held in
favour of the appellant. Relevant portions of the order are
reproduced below:

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“5. The main issue that is to be decided in this appeal is whether the
Appellant is liable to include the value of air tickets / train tickets
charges in the taxable value of Tour Operator Service?

6. We find that the issue involved in the present appeal has already
been covered by the decision of the Tribunal Chennai in the
Appellant’s own case vide F.O.No. 40738/2023 dated 31.08.2023
which reads as below: -
“7. It is the case of the appellant that the dispute pertains to the trading
air tickets as bought from travel agents and sold to the customers, with
or without profit, and same did not include any other activities other
than mere selling of or trading in such air tickets. It is an admitted fact
on record that insofar as the other activities are concerned, the appellant
has admitted and paid applicable Service Tax. It is also an undisputed
fact that the appellant is not a member or agent of IATA and that it is
not the case of the Revenue that the appellant had earned any
commission from IATA or any other airlines when it sold or traded in air
tickets. Moreover, from the definition of tour operator service, we find
that the same involves a gamut of activities and there is nothing to
suggest that trading in air tickets per se invited Service Tax.
8. In view of the above, we hold that the demand of Service Tax on the
consideration and for booking of tickets in respect of domestic travel is
not a taxable event and hence, to this extent, the direction of the
Commissioner (Appeals) cannot sustain. Consequently, we set aside this
part of the impugned order, by holding that the appellant is not liable to
pay Service Tax on the mark-up or margin earned for booking tickets
with regard to domestic travels.
9. The appeal, therefore, is allowed with consequential
benefits, if any, as per law.”

7. Appreciating the applicability of the ratio of the above decision, we
are of the opinion that demand cannot sustain. The impugned Order-
in-Appeal No. 77/2016 (CXA-II) dated 29.02.2016 is ordered to be
set aside.

8. Thus, the appeal is allowed with consequential relief, if any, as per
the law.”

9. Revenue has not shown to us that the aforesaid Final Order
No.40485/2025 dated 02.05.2025 in the appellant's own
case, has not attained finality. Therefore, when the lis, regarding
the nature of the particular transaction and its exigibility to service
tax inter se the parties, has attained finality and all the more
when there is no allegation or evidence that the present
transactions are of a different nature, that forms yet another
compelling reason to decide the present dispute in the Appellant’s
favour.

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10. For the aforesaid reasons, respectfully following the decision of
the coordinate bench noticed above, we set aside the impugned
order.”

8. We find no reason to take a different view in this matter. Following
the aforesaid the Co-ordinate Bench Final Orders, the impugned order is
set aside. The appeal is allowed with consequential relief in law if any.

(Order pronounced in the open court on 29.10.2026)


(AJAYAN T.V.) (VASA SESHAGIRI RAO)
Member (Judicial) Member (Technical)

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