TMI Blog2018 (2) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... orities for performing such activities is in the nature of compulsory levy. Only if such authority performs service which is not in the nature of statutory activity and the same is undertaken for a consideration which is not in the nature of statutory fee, service tax would be leviable if the activity undertaken otherwise falls within the ambit of taxable service - service tax not leviable - appeal allowed - decided in favor of appellant. - ST/89885/14 - A/85132/2018 - Dated:- 29-1-2018 - Shri Ramesh Nair, Member ( Judicial ) And Shri Raju, Member ( Technical ) Shri A. R. Krishnan, C.A. for Appellant Shri M. P. Damle, Asstt. Commr. (A.R) for respondent ORDER Per : Ramesh Nair The fact of the case is that the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed the following order: 5.We have given careful consideration to the submissions. Firstly, it will be necessary to note what is set out in the circular dated 18th December, 2006 bearing No.89/7/2006. Clauses 2 and 3 of the said circular read thus :- 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided them various facilities including maintenance, management and repairs of the facilities in the MIDC area. As stated earlier, reliance is placed on clause 64 of Section 65 of the said Act. As pointed out earlier, MIDC is already registered under the category of renting of immovable property and for services covered by such category, MIDC is admittedly paying service tax. 8. At this stage, a reference will have to be made to certain provisions of the MID Act. The preamble of the Act shows that for securing orderly establishment of Industrial Areas and Industrial Establishments of Industries in the State of Maharashtra and for assisting generally in the organization thereof, MID Act has been enacted for the establishment of a Corpora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Ramtanu Co-operative Housing Limited and another, the Apex Court was dealing with the issue of constitutional validity of MID Act. In paragraphs 15 and 16, the Apex Court held thus :- 15. The pith and substance of the Act is establishment, growth and organisation of industries, acquisition of land in that behalf and carrying out the purposes of the Act by setting up the Corporation as one of the limbs or agencies of the Government. The powers and functions of the Corporation show in no uncertain terms that these are all in aid of the principal and predominant purpose of establishment, growth and establishment of industries. The Corporation is established for that purpose. When the Government is satisfied that the Corporation ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oration consists of nominees of the State Government, State Electricity Board and the Housing Board. The functions and powers of the Corporation indicate that the Corporation is acting as a wing of the State Government in establishing industrial estates and developing industrial areas, acquiring property for those purposes, constructing buildings, allotting buildings, factory sheds to industrialists or industrial undertakings. It is obvious that the Corporation will receive moneys for disposal of land, buildings and other properties and also that the Corporation would receive rents and profits in appropriate cases. Receipts of these moneys arise not out of any business or trade but out of sole purpose of establishment, growth and developme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e activities for which the demand was made are part of the statutory functions of the MIDC under MID Act. As stated earlier, the demand is in respect of service charges collected from plot holders for providing them various facilities including maintenance, management and repairs. As provided in the circular dated 18th December, 2006, for providing amenities to the plot holders, the service fees or service charges collected by MIDC are obviously in the nature of compulsory levy which is used by MIDC in discharging statutory obligations under Section 14. We find that even in the Order-in-Original, there is no finding of fact recorded that the service rendered for which service tax was sought to be levied was not in the nature of statutory ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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