2008 (12) TMI 169 - AT - Service Tax

Business Auxiliary Service - short term improvement of the roads, routine maintenance and also include maintenance of toll booths, collection and remittance of toll amount to the National Highway Authority of India - the sum of Rs.10,00,000/- already deposited - pre-deposit of balance amount of duty, interest and penalty waived

Summary

Issues:
1. Classification of services provided by the applicant under Business Auxiliary Services.
2. Time-bar applicability for the Service Tax demand.
3. Pre-deposit requirement and stay of recovery pending appeal.

Analysis:
1. The primary issue in this case revolved around the classification of the services provided by the applicant as Business Auxiliary Services. The Original Authority and the Commissioner (Appeals) categorized the activities of maintaining a 96-kilometer stretch of National Highway, including routine maintenance and toll collection, as falling under Business Auxiliary Services. The advocate for the applicant argued that since the National Highway Authority of India (NHAI) is not engaged in business activities, the applicant cannot be considered as providing business auxiliary services. The advocate highlighted the definitions of Business Auxiliary Services before and after a specific date, emphasizing the lack of business activities by NHAI.

2. Another significant issue raised was the applicability of the time bar for the Service Tax demand. The advocate contended that the demand for the period from 10-9-2004 to 31-1-2006 should be considered time-barred due to the absence of willful suppression or misstatement. Additionally, the advocate mentioned a demand for the earlier period amounting to approximately Rs. 16,00,000. On the other hand, the Departmental Representative argued against the time-bar, stating that NHAI could entrust functions to other entities, implying the provision of Business Auxiliary Services by the applicant.

3. The Tribunal, after considering the submissions from both sides and noting that the case was before them for the second time, decided to delve into the merits of the case in detail during the final hearing. However, the Tribunal expressed a prima facie view that the demand for the period from 10-9-2004 might be time-barred. Given that a sum of Rs. 10,00,000 was already pre-deposited during the earlier litigation round, the Tribunal deemed it sufficient under Section 35F. Consequently, the Tribunal waived the pre-deposit requirement for the balance amount of duty, interest, and penalty, staying the recovery pending the appeal's disposal.

This comprehensive analysis of the judgment highlights the key legal issues, arguments presented by both parties, and the Tribunal's decision, providing a detailed understanding of the case's intricacies and legal implications.