TMI Blog2022 (2) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... r the law laid down by this Court in a catena of decisions, in a taxing statute, it is the plain language of the provision that has to be preferred, where language is plain and is capable of determining a defined meaning. Strict interpretation of the provision is to be accorded to each case on hand. Purposive interpretation can be given only when there is an ambiguity in the statutory provision or it results in absurdity, which is so not found in the present case. It is to be noted that on and after 01.07.2012, such activities carried out by the Agricultural Produce Market Committees is placed in the Negative List. If the intention of the Revenue was to exempt such activities of the Market Committees from levy of service tax, in that case, there was no necessity for the Revenue subsequently to place such activity of the Market Committees in the Negative List. The fact that, on and after 01.07.2012, such activity by the Market Committees is put in the Negative List, it can safely be said that under the 2006 circular, the Market Committees were not exempted from payment of service tax on such activities - it is required to be noted that it is not the case on behalf of the Market C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e land and shops to traders and collect allotment fee/lease amount for such land/shop. That the Revenue was of the view that the appellants are liable to pay the service tax on the services rendered by them by renting/leasing the lands/shops. Show cause notice was issued by the concerned jurisdictional authorities. That after adjudication, it was held that the appellants were not liable to pay the service tax on market fee or mandi shulk collected by them. However, the appellants were held liable for service tax under the category of renting of immovable property in respect of renting of land(s)/shop(s) for a consideration. Accordingly, the Service Tax demands were confirmed. Penalties under Sections 76, 77 and 78 of the Finance Act, 1994 were also imposed on them. The appellants preferred appeals before the CESTAT. 2.1 By impugned common judgment and order, the CESTAT noted that with the introduction of Negative List Regime of taxation w.e.f. 01.07.2012, the services in question were excluded from the tax liability and therefore the appellant(s) being an Agricultural Produce Market Committee was/were excluded from tax liability on and after 01.07.2012. The CESTAT also too ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kul Khurana and Ms. Divyasha Mathur, learned counsel appearing on behalf of the respective appellants respective Market Committees have vehemently submitted that as the activity of allotment of shops/premises/spaces to traders and brokers by the respective Market Committees for the purpose of storage and/or marketing of agricultural produce is in the nature of a statutory activity as mandated under Section 9 of the Act, 1961 and, therefore, the Market Committees are exempted from payment of service tax on such services as per Circular No.89/7/2006 dated 18.12.2006. 3.1 Learned counsel appearing on behalf of the appellants have submitted that under Section 9(2)(xvii) of the Act, 1961, it is the duty cast upon the respective Market Committees for allotment/disposal of land or any movable or immovable property for the purpose of effectively carrying out its duties. It is submitted that as per Section 9(2)(xiii), the Market Committees are authorised to levy, recovery and receive rates, charges, fees and other sums of money to which the Market Committee is entitled. Therefore, it is the case on behalf of the respective Market Committees that the activities of the said Market Commit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt that an exemption notification has to be read as a whole. That an exception and/or an exemption provision in a taxing statute should be construed strictly and it is not open to the Court to ignore the conditions prescribed in an exemption notification. It is submitted that the exemption notification should be strictly construed and given meaning according to legislative intendment. It is contended that the Statutory provisions providing for exemption have to be interpreted in light of the words employed in them and there cannot be any addition or subtraction from the statutory provisions. 4.4 It is further submitted that as per the law laid down by this Hon ble Court in a catena of decisions in a taxing statute, it is the plain language of the provision that has to be preferred, where language is plain and is capable of determining a defined meaning. Strict interpretation to the provision is to be accorded to each case on hand. 4.5 Now, in so far as the submission on behalf of the appellants that in the event of any doubt or any absurdity in a provision in a fiscal statute, construction favourable to the assessee should be adopted is concerned, it is submitted that the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. The exemption circular issued by the Board reads as under:- Circular No.89/7 /2006 dated 18.12.2006:- A number of sovereign /public authorities (i.e., an agency constituted/set up by Government) perform certain functions/duties, which are statutory in nature. These functions are performed in terms of specific responsibility assigned to them under the law in force. For examples, the Regional Reference Standards Laboratories (RRSL) undertake verification, approval and calibration of weighing and measuring instruments; the Regional Transport Officer (RTO) issues fitness certificate to the vehicles; the Directorate of Boilers inspects and issues certificate for boilers; or Explosive Department inspects and issues certificate for petroleum storage tank, LPG/CNG tank in terms of provisions of the relevant lows. Fee as prescribed is charged and the same is ultimately deposited into the Government Treasury. A doubt has arisen whether such activities provided by a sovereign/public authority required to be provided under a statute can be considered as 'provision of service' for the purpose of levy of service tax. 2. The issue has been examined. The Board i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty is not entitled to the benefit of that notification. An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the court to ignore the conditions prescribed in the relevant policy and the exemption notifications issued in that regard. 8.2 The exemption notification should be strictly construed and given a meaning according to legislative intendment. The Statutory provisions providing for exemption have to be interpreted in light of the words employed in them and there cannot be any addition or subtraction from the statutory provisions. 8.3 As per the law laid down by this Court in a catena of decisions, in a taxing statute, it is the plain language of the provision that has to be preferred, where language is plain and is capable of determining a defined meaning. Strict interpretation of the provision is to be accorded to each case on hand. Purposive interpretation can be given only when there is an ambiguity in the statutory provision or it results in absurdity, which is so not found in the present case. 8.4 Now, so far as the submission on behalf of the respondent that in the event of ambiguity in a provision in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then only it can be said to be a mandatory statutory obligation otherwise it is only a discretionary function under the statute. If it is discretionary function, then, it cannot be said to be a mandatory statutory obligation/statutory activity. Hence, no exemption to pay service tax can be claimed. 10. The next provision relied upon by the appellants respective Market Committees is Rule 45 of the Rajasthan Agricultural Produce Markets Rules, 1963 (hereinafter referred to as Rules, 1963 ), which reads as under:- 45. The Market Committee fund.- All money received by the Market Committee shall be credited to the fund called the Market Committee fund. Except where Government on application by the Market Committee or otherwise shall direct, all money paid into the Market Committee fund shall be credited at least once a week in full into Government treasury or sub-treasury, or a bank duly approved for this purpose by the Director. All balance from the fund shall be kept in such treasury or subtreasury or bank and it shall not be withdrawn upon except in accordance with these rules. 10.1 Now, so far as the submission on behalf of the appellants relying upon Rule 45 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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