M/s KINGFISHER TRAINING& AVIATION SERVICES LTD Vs CCE, Mumbai (CESTAT, Mumbai) 2013-TIOL-1463-CESTAT-MUM
Facts of case:
The appellantare in the business of transporting passengers by air. While transporting the passengers, the baggages of passengers are also transported. There is a free allowance for carrying of baggage and any baggage in excess of free allowance is liable to transportation charges. The Revenue was of the view that charges collected by the Airlines for the excess baggage is liable to Service Tax under the category of Transportation of Goods by Air' and accordingly, notices demanding Service Tax were issued. The notices were adjudicated and the demands were confirmed along with interest thereon and also imposing penalties.
Held:
The principal service involved in the present case is transportation of passengers by air. While rendering the services to passenger, his baggage is also transported free of cost within specified limits and the cost of transportation of baggage is included in the fare of transportation of the passenger by air. When the weight of the baggage exceeds the free allowance limits, they collect excess baggage charges from the passengers, and this does not mean that they are transporting goods by air. Transportation of baggage is not an individual or separate service, but it is a component of the principal service, and the principal service is transportation of the passenger by air. The Board has also clarified this position vide the circular dated 29.2.2008 which states that – for the purpose of classification of a service covering number of separate services, a view has to be taken as to whether an individual service is merely a component of the overall supply or is itself a distinct and independent supply. Accordingly, the transportation of baggage is not an individual or a separate service, but it is a part of transportation of passengers' service by air.
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