2016 (10) TMI 746 - AT - Service Tax

Levy of service tax - management, maintenance or repair of immovable property - Section 97 of the Finance Act, 2012 vide which the management, maintenance and repair of roads, during the period on and from the 16/6/05 to 26/7/2009 were retrospectively amended with the provisions for grant of refund, if any, service tax stand paid on the same - Held that - Section 97 of the Finance Act, 2004 grants exemption to the management, maintenance and repair of roads, with retrospective effect till 26th July, 2009. The period involved in the present appeal is 16/5/2005 to June, 2007, which periods stand covered by the above amendment. In view of the same, we find no merits for confirmation of demand of service tax on the said ground to the extent of ₹ 67,64,987/-. Accordingly, the same is set aside alongwith setting aside of penalty on the same count. Business Auxiliary Service - contracts by NHAI - collection of tolls and deposit the same with the authorities, while retaining a small percentage as their commission - Held that - reliance placed in the decision of COMMR. OF SERVICE TAX, DELHI Versus INTERTOLL ICS CE CONS O & MP. LTD. 2013 (12) TMI 731 - CESTAT NEW DELHI where it was held that such activity of toll collection on commission basis would not fall under the category of business auxiliary services, so as to make the same liable to service tax - service not liable to tax. As the demand stand set aside on merits, the plea of limitation raised by the appellant is not being adverted to. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confirmation of service tax demand on management, maintenance, and repair of immovable property.
2. Confirmation of service tax demand under Business Auxiliary Service.

Issue 1 - Management, Maintenance, and Repair of Immovable Property:
The appellant contested the service tax demand on management, maintenance, and repair of public roads, citing a retrospective amendment under Section 97 of the Finance Act, 2012. The appellant argued that this retrospective amendment allowed for a refund of service tax paid on such activities. Referring to the case of Patel Infrastructure Pvt. Ltd. vs. CCE, Rajkot, where a similar demand was set aside due to the retrospective amendment, the appellant sought relief. The tribunal acknowledged the retrospective amendment and set aside the demand of ?67,64,987 along with the penalty.

Issue 2 - Business Auxiliary Service:
Regarding the service tax demand under Business Auxiliary Service for toll collection contracts awarded by NHAI, the appellant argued that toll collection did not amount to providing business auxiliary services. The appellant relied on various tribunal decisions supporting this argument. Citing cases such as Intertoll India Consultants (P) Limited vs. CCE, Noida and Ideal Road Builders P. Ltd. vs. CST, Mumbai, the appellant contended that toll collection activities were not subject to service tax. The tribunal, following the precedent set by these decisions, set aside the demand of ?18,64,337 related to toll collection, along with the penalty.

Conclusion:
The tribunal found merit in the appellant's arguments and set aside both the service tax demands on the grounds of the retrospective amendment for management, maintenance, and repair of roads, as well as the nature of toll collection activities not falling under Business Auxiliary Service. As a result, the impugned order was set aside, and the appeal was allowed in favor of the appellant. The plea of limitation was not considered as the demands were set aside on merits.