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2013 (3) TMI 379 - AT - Service TaxClassification of Services - Waiver of Pre-deposit - modification/rectification of the stay order 2012 (6) TMI 301 - CESTAT, MUMBAI - NHAI is a statutory body performing a statutory function - Held that - Activity undertaken by NHAI is a business activity and the service rendered by the appellant to NHAI appeared to be classifiable under business auxiliary service. This activity was outsourced by NHAI by engaging agents for collection of toll on their behalf. It is not a statutory levy and NHAI was not performing a statutory function As has been held by Tribunal in the case of Parasrampuria Indus. Ltd.(2011 (2) TMI 535 - CESTAT, MUMBAI ), unless there are change of circumstances or new developments that have taken place after passing the stay order, the stay order cannot be modified/rectified. - stay order to be complied with - against assessee.
Issues:
1. Modification/Rectification of stay order directing pre-deposit under Finance Act and Central Excise Act. 2. Applicability of business auxiliary service to toll collection rights contract with NHAI. 3. Consideration of NHAI's statutory function in determining business auxiliary service. 4. Maintainability of modification application based on change in circumstances after stay order. 5. Interpretation of activities undertaken in toll collection for NHAI. Analysis: 1. The judgment deals with a miscellaneous application seeking modification/rectification of a stay order passed by the Tribunal directing an appellant to make a pre-deposit under the provisions of the Finance Act and the Central Excise Act. The appellant contested the pre-deposit amount, arguing that the toll rights contract with NHAI did not fall under business auxiliary service, thus requesting a waiver of the demand for pre-deposit. 2. The appellant's submission focused on the nature of the toll collection rights contract with NHAI, claiming that the acquisition of such rights and the consideration paid did not constitute business auxiliary service. The appellant relied on a judgment of the Bombay High Court to support this contention. However, the Tribunal, after considering the arguments, concluded that the activity undertaken by NHAI was a business activity and the service rendered by the appellant could be classified as business auxiliary service. The Tribunal emphasized that the mode of payment did not alter the nature of the service provided, as the toll collection was outsourced by NHAI to agents, including the appellant. 3. The Tribunal addressed the argument regarding NHAI's statutory function, stating that NHAI's toll collection activity was not a statutory levy or function, as the proceeds did not go into the consolidated fund of the Union. Therefore, NHAI was not considered to be performing a statutory function in this context. The Tribunal's decision was also influenced by previous judgments that emphasized the need for a change in circumstances or new developments to warrant a modification of a stay order. 4. The Tribunal dismissed the modification application, directing the appellant to comply with the original stay order and report compliance by a specified date. The decision was based on the Tribunal's analysis of the activities involved in toll collection for NHAI, emphasizing the nature of the service provided and the lack of significant changes in circumstances to justify a modification of the stay order. In conclusion, the judgment underscores the Tribunal's interpretation of the business auxiliary service in the context of toll collection rights contracts with NHAI, highlighting the importance of considering the nature of activities undertaken and the absence of substantial changes to warrant modifications to stay orders.
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