2013 (1) TMI 522

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..... ing of the existing two-lane carriageway from KM 0/115 to KM 23/509 of Thane-Bhiwandi bye-pass road. The Public Works Department (PWD) of Government of Maharashtra awarded the contract for this purpose. To compensate the appellant for undertaking the work they were authorised to collect tolls from the users of the road at various places. The appellant collected tolls from the users. The department was of the view that the appellant was required to discharge service tax liability on this activity under the category of "Business Auxiliary Service" and accordingly a show-cause notice dated 21/10/2011 was issued demanding a service tax of Rs.30,30,07,734/- on the total toll collection of Rs.264,06,80,930/- during the period 2006-07 to 2010-11. .....

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..... dated 22/02/2012 is re-produced below:-     "A representation has been received by the Board, seeking clarification regarding leviability of service tax on toll fee (hereinafter referred as 'toll') paid by users, for using the roads. The representation has been examined.     2. Service tax is not leviable on toll paid by the users of roads, including those roads constructed by a Special Purpose Vehicle (SPV) created under an agreement between National Highway Authority of India (NHAI) or a State Authority and the concessionaire (Public Private Partnership Model, Build-Own/Operate-Transfer arrangement). 'Tolls' is a matter enumerated (serial number 59) in List-II (State List), in the Seventh Schedule of the Co .....

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..... fer basis, there is no service tax liability. 5.4 Construction of roads has been specifically excluded from the scope of service tax levy both under "Commercial and Industrial Construction Service" and "Works Contract Service". Further repair and maintenance of roads have also been exempted from service tax retrospectively in this year's budget. Thus the intention of the Government is to keep out road construction activity from the purview of service tax. If that be so, how can service tax be levied on the very same activity under Business Auxiliary Service? Such a view does not appeal to any reason or logic. 5.5 In view of the clarification given by the Board, the impugned order does not sustain. Accordingly we set aside the impugned ord .....

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