TMI Blog2016 (6) TMI 367X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee himself or the agent of assessee. In the present case, the appellant is a company incorporated under Companies Act, 1956 and acted as agent on behalf of the Chhattisgarh Govt. which authorised it to lease out land to prospective entrepreneurs for setting up industry, etc. and to provide various services on behalf of State Govt. and it accordingly is covered under the definition of assessee. Invokation of extended period of limitation - Imposition of penalty - Section 76 & 78 of the Finance Act, 1994 - Wilful mis-statement of facts - Held that:- mere non-disclosure of the facts to the department can sustain the said allegation. In view of various case laws, the extended period of limitation is not invocable in the present case, which renders (part of) the demand pertaining to the 'extended' period beyond the normal period time-barred and penalty under Section 78 ibid non-imposable. The adjudicating authority has clearly held that penalty under Sections 76 and 78 ibid are imposable but penalty under Section 76 is not imposed as penalty under section 78 is imposed. As a corollary it follows that if penalty under section 78 ibid is not found imposable, penalty under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed as statutory duty/function. (ii) As agent of the Governor/State Govt., the appellant was liable to pay service tax. (iii) The service rendered is clearly taxable under maintenance and repair service. 5. We have considered the contentions of both sides and perused the records. Both sides referred to certain judicial pronouncements ,relevant ones of which will be duly adverted to. 6. The appellant is a limited company registered under the Companies Act, 1956, which was leasing the Govt. land and also collecting charges for maintenance of street light and repair and maintenance of roads, etc. from the entrepreneur allottees of the land. Even if these charges are statutorily prescribed, they remain a consideration for rendition of service. There is nothing in Section 66 of the Finance Act, 1994 which implies that if charges for rendition of taxable service are statutorily prescribed the same would not be liable to service tax. Similarly, there is nothing in Section 65 ibid to imply or even suggest that a service rendered as part of statutory duty/obligation will not be treated as taxable service even if it satisfied the definition of any of the taxable services enumerated the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of levy of service tax. 2. The issue has been examined. The Board is of the view that the activities performed by the sovereign/public authorities under the provision of law are in the nature of statutory obligations which are to be fulfilled in accordance with law. The fee collected by them for performing such activities is in the nature of compulsory levy as per the provisions of the relevant statute, and it is deposited into the Government Treasury. Such activity is purely in public interest and it is undertaken as mandatory and statutory function. These are not in the nature of service to any particular individual for any consideration. Therefore, such an activity performed by a sovereign/public authority under the provisions of law does not constitute provision of taxable service to a person and, therefore, no service tax is leviable on such activities. 3. However, if such authority performs a service, which is not in the nature of statutory activity and the same is undertaken for a consideration not in the nature of statutory fee/levy, then in such cases, service tax would be leviable, if the activity undertaken falls within the ambit of a taxable s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garding the contention of the appellant that its activities should fall under the taxable category of Commercial or Industrial Construction Service (CICS) defined under Section 65 (105) (zzq) read with Section 65 (25b) ibid and not under Repair and Maintenance service, it is observed that the documents which spell out the activities; mention about maintenance of industrial area and annual street light charges. The taxable Commercial or Industrial Construction Service (CICS) [Section 65(25b)] ibid inter alia covers the repair, alteration, renovation or restoration of building/civil structures or similar services in relation to building or civil structure, which is not the case here. On the other hand, (Management), Maintenance or Repair Service (MMR) was defined in Section 65(64) ibid as under:- Prior to 01.05.2006 (64) maintenance or repair means any service provided by - (i) Any person under a contract or an agreement; or (ii) A manufacturer or any person authorised by him, in relation to,- (a) Maintenance or repair including reconditioning or restoration, or servicing of any goods or equipment, excluding motor vehicle; or (b) Maintenance or ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an auction under a winding up order. Further, we have noticed the settled law that an Official Liquidator steps into the shoes of the Director of the company in liquidation and performs his statutory functions in accordance with the directives of the Court. Furthermore, Rule 54 of the Rules, 1963 contemplates a situation where a business owned by a dealer, is under the control of a receiver or manager or any other person, irrespective of his designation, who manages the business on behalf of the said dealer. In the said scenario, the said person, in-charge of the business on behalf of the dealer, would be exigible to sales tax in the same manner as it would have been leviable upon and recoverable from the dealer itself. Therefore, it can be concluded that the liability to pay sales tax, in the present case, would be on the Official Liquidator in the same manner as the dealer, that is, the Company in liquidation. 10. As regards the allegation of wilful mis-statement of facts, we find that the only para 7 of the Show Cause Notice contains the basics of the said allegation and is quoted below:- 7. Further, Noticee has never disclosed the facts in writing to the department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der section 78 ibid is not found imposable, penalty under section 76 would spring bad to life. However, we also note that the adjudicating authority waived the penalty prescribed under Section 76 ibid under Section 80 of Finance Act, 1994. Section 80 ibid reads as under:- Notwithstanding anything contained in the provisions of section 76, [section 77 or [first proviso to sub-section (1) of]] section 78, no penalty shall be imposable on the assessee for any failure referred to in the said provisions if the assessee proves that there was reasonable cause for the said failure. As Section 80 ibid has been invoked by the adjudicating authority for not imposing penalty under Section 76 ibid, (and Revenue is not in appeal on this issue), penalty under Section 76 ibid in this case would obviously not spring back to life even if penalty under Section 78 ibid is set aside. 11. In the light of the foregoing, we partially allow the appeal in-as-much-as:- (i) The demand (along with interest) pertaining to extended period beyond the normal period is set aside and only demand (along with interest) pertaining to normal period is sustained. (ii) Penalty under Section 78 ibid is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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