Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2017 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (10) TMI 401 - AT - Service TaxClassification of services - collection of toll - Business Auxiliary Services or not? - Held that: - the Respondents has secured the right to toll collection in auction. The Respondents being the suitable bidder were given right to collect the toll and under the terms and conditions of such auction the Respondents were liable to pay the bid amount to NHAI/ MSRDC. Such bid price which the Respondents were liable to pay to the NHAI/ MSRDC was in no way connected with the collection of toll or quantum of toll amount. The Respondents had to pay NHAI/ MSRDC the bid amount irrespective of the fact whether such activity would earn him profit or loss. The NHAI/ MSRDC were in no way concerned with the collection made by the Respondents. As a result of same we find that though in case of Respondent M/s MEP income from toll collection was in negative during the year 2007 - 08, 2008 09 and 2011 12 but they had to pay the bid amount to NHAI/ MSRDC. This leaves no doubt, that the activity of toll collection by the Respondents was not on behalf of NHAI/ MSRDC but on their own account once they had secured the right to collect the toll. The activity of NHAI/ MSRDC is of developing, maintaining and management of national state highways which is a statutory function. They have not been engaged in the said activity as business. In such case it cannot be said that the Respondents has been providing auxiliary service to any business. NHAI/MSRDC is engaged in sovereign function and not into any business activity. It has been held in catena of judgments of Tribunal that NHAI/MSRDC is not into business activity. For this reason the Respondents cannot be said to be engaged in rendering business auxiliary services to any person. Commission Income - Held that: - The Respondent's case is not even concerned with charging commission from NHAL or MSRDC - The toll collection is not being done on commission basis or in lieu of any remuneration. All the proceeds of the toll collection belong to the Respondents with no interference or right of NHAI/ MSRDC. The income so generated is their own business income and NHAI/ MSRDC has no right over such toll collection. The toll is not collected by the Respondents as representative or agent of NHAI/ MSRDC nor any commission in terms of quantum of amount or percentage is charged by the Respondents from NHAI/ MSRDC. They are liable only to pay the bid amount installment to NHAI/ MSRDC irrespective of any collection which can in no way be said to be commission income. The toll collection is their own income and is not parted with NHAI/ MSRDC as they are concerned only with the bid amount finalized in auction and therefore cannot be termed as activity of Business Auxiliary Service - the activity of the Respondent cannot be considered as Business Auxiliary Service and cannot be taxed to service tax. Time limitation - Held that: - the demands are time barred as the show cause notices for the later period were issued earlier which clearly shows that the revenue was in knowledge of the facts - the demands are not sustainable on being time barred. Appeal dismissed - decided against Revenue.
|