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2012 (12) TMI 878 - AT - Service TaxBusiness Auxiliary Service - toll tax collection in terms of the agreement entered into assessee & M/s National Highways Authority of India (NHAI)- Held that - NHAI has availed the services of respondents and the said NHAI is not established by Revenue to be business concern or a commercial concern engaged in any business activities. Therefore, providing BAS to such NHAI is not conceivable As decided in Intertoll India Consultants (P.) Ltd. v. CCE 2011 (5) TMI 257 - CESTAT, NEW DELHI that toll tax and fee for use of bridge, by retaining the percentage of such collection, the activity cannot be held to be falling under BAS - appeal filed by the Revenue was dismissed. Invoking extended period of limitation - Held that - As decided in Brij Motors (P.) Ltd. v. CCE 2011 (11) TMI 410 - CESTAT, NEW DELHI when the issue is interpreted by judicial forums in different ways, the extended period cannot be invoked in such a situation - in favour of assessee.
Issues:
Demand of service tax on toll tax collection services under 'Business Auxiliary Service' (BAS) agreement with NHAI, contention of composite contract, limitation period for demand, applicability of penalties. Analysis: 1. Demand of Service Tax on Toll Tax Collection Services under BAS Agreement: The judgment confirms the demand of service tax on toll tax collection services amounting to Rs. 40,61,153/- along with penalties under sections 78 and 76 of the Finance Act, 1994. The lower authorities held that the appellants provided BAS to NHAI through toll tax collection, road maintenance, incident management, etc. The contention of the appellants regarding the composite nature of the contract and non-segregation of services was rejected by the lower authorities. 2. Contention of Composite Contract and Segregation of Services: The appellant argued that the toll collection services were part of a composite contract with NHAI, which included various activities like equipment supply and maintenance. They claimed that toll operation cannot be isolated from the overall contract and that the definition of BAS did not specifically apply to their services. However, the lower authorities emphasized that separate bills were raised for distinct activities, including toll operation, which fell under the definition of BAS. 3. Limitation Period for Demand and Imposition of Penalties: The Commissioner (Appeals) upheld the invocation of the extended period for demand, citing the appellant's failure to register under the service tax law and the detection of mis-declaration by officers. The imposition of penalties was justified on the grounds of non-voluntary disclosure and mis-declaration. However, the appellant argued that the demand was barred by limitation as they believed in good faith that toll collection services were not taxable. 4. Applicability of Precedents and Tribunal Decisions: The judgment referenced previous Tribunal decisions in similar cases involving toll tax collection services. It highlighted cases where the Tribunal dismissed appeals by the Revenue, stating that providing BAS to NHAI was not applicable as NHAI was not established as a business or commercial concern. The judgment also cited cases where toll tax collection activities were not considered as falling under BAS. Additionally, the Tribunal's stance on the invocation of the extended period for demand varied based on the interpretation of issues by judicial forums. 5. Final Decision and Relief Granted: After considering the precedents and applying their ratio to the present case, the Tribunal concluded that the toll fee collection activities of the appellants did not constitute a service provided to NHAI falling under the category of BAS. Consequently, the impugned order confirming the demand and penalties was set aside, and the appeal was allowed with consequential relief to the appellants.
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