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2023 (2) TMI 831 - AT - Service TaxTaxability - amount collected as toll (user fee) from user of toll roads under the category of Business Auxiliary Service under proviso to section 73(1) of the Finance Act, 1994 - period of show cause notice is from 01.12.2010 to 31.03.2013 - collection of toll /user fee by the appellant on behalf of NHAI tantamount to a service or not? HELD THAT:- The allegation that the appellant worked as an ‘Commission Agent’ on whose behalf he collects the toll, appears to have overlooked the underlying scheme of the tender which brought the appellant into this transaction. The contractual arrangement between the appellant and NHAI was for undertaking the collection of toll or user fee. The terms of the contract is very clear: possession of the ‘Kanwaliyas Toll Plaza’ asset is transferred to the appellant for the stream of lumpsum payment guaranteed by the appellant. Any deficit returns owing to decreased vehicular traffic or any other reason affects the revenue steam of the appellant. A ‘Commission Agent’ is akin to a channel partner in delivery of goods/service, wherein the Principal bears all the risks. In the instant case, the tax liability does not arise by way of being Commission Agent as per section 65(19) of the Finance Act, 1994 for the period prior to introduction of negative list regime. This issue under consideration is squarely covered by the order of this Tribunal in the case of SOUVENIR DEVELOPERS INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS & SERVICE TAX– I [2022 (5) TMI 868 - CESTAT MUMBAI] where it was held that Oversight by agencies of the state is intended to assure proper maintenance of the asset and fixation of rates is retained by the government to prevent exploitative exaction both of which are mandated by public interest and not as a facet of principal-agent equation. Thus, tax liability does not arise by way of being ‘commission agent’ in section 65(19) of Finance Act, 1994 for the period prior to introduction of ‘negative list’ regime. Appeal allowed.
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