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2015 (8) TMI 592 - CESTAT MUMBAI

2015 (8) TMI 592 - CESTAT MUMBAI - 2015 (40) S.T.R. 480 (Tri. - Mumbai) - Business Auxiliary Service - collection of toll / fee - appellant were providing various services to National Highway Authorities of India - Held that:- Appellant herein is not promoting or marketing or selling goods produced by a client nor is he promoting or marketing services provided by the client, inasmuch that undisputedly NHAI is a statutory body which has been constituted by the National Highway Authorities of Indi .....

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lant is not considered as Business Auxiliary Service provided to NHAI - Decided in favour of assessee. - Appeal No. ST/85/10-Mum - Final Order No. A/1923/2015-WZB/STB - Dated:- 1-7-2015 - M V Ravindran, Member (J) And P S Pruthi, Member (T),JJ. For the Appellant : Shri A R Krishnan, CA For the Respondent : Shri B S Meena, Addl. Comm. (AR) ORDER Per: M V Ravindran: This appeal is directed against Order-in-Original No. 46/BR-42/ST/TH-1/2009 dated 19.11.2009. 2. The relevant facts that arise for co .....

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were collecting toll on behalf of NHAI and were getting payments from NHAI and they were not registered with the service tax authorities. Coming to such a conclusion, a show-cause notice dated 10.04.2007 was issued for demand of service tax liability for the period 01.07.2003 to 31.01.2007 under the head "Business Auxiliary Service" as also for demanding interest and for imposition of penalty. Appellant contested the show-cause notice on merits inter alia pleading that NHAI is Governm .....

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pellant would take us through the contracts /agreements signed by the appellant with NHAI. He would also take us through the entire case records and submit that NHAI is not in the activity of development, maintenance and management of National highway, which is a statutory function/body towards public welfare and not a business activity. Hence service, if any, provided by the appellant to NHAI cannot be said to be auxiliary to "business". According to him appellant activity of toll col .....

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Business Auxiliary Service for the purpose of which he relies upon decision of the Tribunal in similar set of facts in the case of Intertoll India Consultants P. Ltd. vs. CCE 2011 (24) STR 611 (Tri-Del). It is also his submission that the Toll Right Contract, which have been awarded to the appellant, there is no service provided to NHAI as toll is collected on appellant's own account for conducting its own business of toll collection; appellants are not agent/representative of NHAI for coll .....

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s considered as a service, benefit of Notification 13/04-ST dated 10.09.2004 would be available as toll is a specie of tax and is enforced contribution imposed by Central Government and remitted to Pay and Accounts officer (National Highway), Ministry of Surface Transport, New Delhi. 4. It is his further submission that as per clause (iv) of the erstwhile definition of Business Auxiliary Service the services rendered by the appellant are not extendable to any of the three clauses nor do they rel .....

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llection. He would submit that the entire agreement if it is ready holistically, it would indicate appellant being appointed as agent for collection of toll and remittance thereof, by directing him to retain as commission a portion of the amount collected as toll and for the services rendered of toll collection. He would also submit that the argument of the appellant for not being included the services under Business Auxiliary Service is incorrect as there has been a service of NHAI to the user .....

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ission that the appellant were acting as representative of NHAI for the collection of tolls from the users of National Highway and for such service having received consideration from NHAI they are liable to discharge service tax liability. 6. We have considered the submissions made at length by both sides and perused the records. 7. Undisputedly, appellant are awarded contract by NHAI for collection of tolls on three various National Highways which has been awarded by two contracts (i) Fixed Rem .....

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. 9. Before recording our finding on the issue it is necessary to reproduce the provisions of Section 65(19) of the Finance Act, 1994 prior to and post 09.09.2004, which is as under: "Business Auxiliary Service" means any service in relation to, (w.e.f. 01.07.2003 to 09.09.2004) (i) promotion or marketing or sale of goods produced or provided by or belonging to the client; or (ii) promotion or marketing of service on behalf of the client; or (iii) any customer care service provided on .....

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client; or (ii) promotion or marketing of service provided by the client; or (iii) any customer care service provided on behalf of the client; or (iv) procurement of goods or services, which are inputs for the client; or (v) production or processing of goods for, or on behalf of, the client; or (vi) provision of service on behalf of the client; or (vii) a service incidental or auxiliary to any activity specified in sub-clauses (i) to (vi), such as billing, issue or collection or recovery of cheq .....

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d that for the purposes of this clause, -(a)"commission agent" means any person who acts on behalf of another person and causes sale or purchase of goods, or provision or receipt of services, for a consideration, and includes any person who, while acting on behalf of another person - (i) deals with goods or services or documents of title to such goods or services; or(ii) collects payment of sale price of such goods or services; or (iii) guarantees for collection or payment for such goo .....

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been constituted by the National Highway Authorities of India Act, 1988; has been in force from 1988 and it gives the NHAI a statutory position. On perusal of the said Act, we find that NHAI is a statutory body for development, maintenance and management of national highway and other highway power which were to be exercised by the Government of India. It is also seen that the said Act also authorises the NHAI to collect an amount as a fees from the users. 11. We find that the main argument of t .....

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ellant and NHAI, we find the said agreement does not indicate anywhere that the appellant is appointed as an agent/representative and the said agreement talks of collection of amounts as "fee" to be known as "toll". In view of this, we find that the appellant is not rendering any service which is incidental or auxiliary on behalf of NHAI. This view of ours is fortified by the decision of the Tribunal in CST vs. Intertoll ICS CE Cons O&M P. Ltd. (supra) wherein the bench h .....

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pproving reasons given by the adjudicating authority." We also find in the case of PNC Construction Co. Ltd. vs. CCE (supra), an identical view has been taken which is as under:- "4. After hearing both the sides, we note that identical issues were the subject matter of the Tribunal's decisions. In this case of Intertoll ICS CE Cons O&M P. Ltd. vide Final order no. ST/A/34/12-Cus, dtd. 23.12.11, the Tribunal observed that NHAI has availed the services of respondent and the said .....

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g under BAS. In the case of Swarna Tollway P. Ltd. vs. CC & CE [2011] 32 STT 162/ 12 Taxmann.com 49 (Bang-CESTAT), again the same status was reiterated. As regards limitation, we find that the Tribunal in the case of Brij Motors P. Ltd. v. CCE [Final Order no. ST/601/2011 (PB), dtd. 22.11.2011] has held that when the issue is interpreted by judicial forums in different ways, the extended period cannot be invoked in such a situation. 5. By applying the ratio of all the above decisions to the .....

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