2018 (4) TMI 1186 - AT - Service Tax

Business Auxiliary Services - collection of Toll Tax and fee for use of highways and bridges - appellant was allowed to retain with them the amount of Toll collected in excess to ₹ 36 Crores as their commission of working as Toll Collecting Agent as terms and condition of Contract Agreement - Held that - the issue is no longer res integra and has been settled in favour of the assessee in the judgment of this Tribunal in the case of Intertoll India Consultants Pvt. Limited 2011 (5) TMI 257 - CESTAT, NEW DELHI , where it was held that N/N. 13/2004 specifically exempts the service tax liability on such services of collection of duties and taxes levied by Government - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Service Tax liability on toll collection activity.
2. Interpretation of Business Auxiliary Service.
3. Applicability of Service Tax liability on toll collection.

Analysis:
Issue 1: The case involved the Service Tax liability on toll collection activity. The appellant collected Toll Tax on behalf of the government of Gujarat and retained the excess amount as their commission. An investigation by DGCEI categorized the activity under Business Auxiliary Service, leading to a Show Cause Notice for duty payment. The matter resulted in the confirmation of the demand, interest, and penalties by the adjudicating authority. The appellant challenged this decision through appeals.

Issue 2: The interpretation of Business Auxiliary Service was crucial in this case. The appellant argued that the toll collection activity should not be considered under this category, citing precedents such as Ideal Road Builders Pvt. Limited vs. Commr. Of S.T., Intertoll India Consultants Pvt. Limited vs. Commr. Of C.EX., and Patel Infrastructure Pvt. Limited vs. Commr. Of C. EX. The Tribunal analyzed the nature of the toll collection, customer definition, and service provided to the National Highway Authority of India (NHAI) to determine the applicability of Business Auxiliary Service.

Issue 3: The applicability of Service Tax liability on toll collection was a key point of contention. The Tribunal examined various judicial pronouncements, including the cases of Intertoll India Consultants Pvt. Limited, Ideal Road Builder Private Limited, and Patel Infrastructure Pvt. Limited. These cases highlighted that toll collection activities did not fall under Business Auxiliary Service and were not considered as services provided to NHAI. Relying on these precedents, the Tribunal set aside the order of the Commissioner (Appeals) and allowed the appeal, concluding that the toll collection by the appellant was not liable for Service Tax under Business Auxiliary Service.

In conclusion, the judgment clarified the non-applicability of Service Tax liability on toll collection activities, emphasizing the distinction between Business Auxiliary Service and toll collection operations. The decision was based on detailed analysis of legal precedents and interpretations of relevant provisions, ultimately providing relief to the appellant in this case.