2022 (12) TMI 94 - AT - Service Tax

Classification of services - fees under the head Standard and Labelling (Registration and labelling Fees) and Processing Fee - whether the fees collected by the respondent was only for furtherance of the enforcement of the provisions of the Energy Conservation Act, 2001 and Bureau of Energy Efficiency (Particulars and Manners of their Display on Labels of Room Air Conditioners) Regulations, 2009? - HELD THAT - It is not in dispute that the Tribunal in the case of the respondent itself, for the earlier period, allowed the appeal filed by the respondent in a matter where the same issue was involved - reliance placed in appellant own case BUREAU OF ENERGY EFFICIENCY VERSUS CST, DELHI 2018 (4) TMI 771 - CESTAT NEW DELHI where it was held that The assessee- Appellants, acting in pursuance to the statutory regulations, collected statutorily fixed fee for such performance, cannot be subjected to Service Tax. The period involved in the matter decided earlier by the Tribunal related to the period 2008-09 to 2012-13, also included the negative list. The period involved in the present case is covered by the decision of the Tribunal. The Commissioner committed no illegality in dropping the proceedings - Appeal dismissed.

Summary

Issues:
Department appealing against dropping of proceedings by Principal Commissioner regarding taxation of services provided by respondent under specific heads.

Analysis:
The Department appealed against the dropping of proceedings by the Principal Commissioner concerning the taxation of services provided by the respondent under the heads of "Standard and Labelling (Registration and labelling Fees)" and "Processing Fee." The dispute pertained to the period 2013-14, with the Department arguing that the services provided should be taxable under "technical inspection and certification service." However, the Commissioner ruled in favor of the respondent, stating that the fees collected were for enforcing the Energy Conservation Act, 2001, and related regulations.

The authorized representative for the Department contended that all services during 2013-14 should be taxable unless exempted, and as the respondent's services did not fall under the negative list or any exemption, they should be taxable. On the other hand, the respondent's counsel cited a previous Tribunal decision in favor of the respondent for an earlier period, emphasizing that the fees collected were for statutory obligations as mandated by law.

The Tribunal noted that in the previous case involving the respondent, it was established that the fees collected were in compliance with statutory obligations and could not be subjected to Service Tax liability. The Tribunal's decision for the earlier period was deemed applicable to the present case, leading to the dismissal of the Department's appeal against dropping the proceedings by the Commissioner.

In conclusion, based on the Tribunal's previous decision and the nature of the fees collected by the respondent for statutory purposes, the Commissioner's action of dropping the proceedings was upheld, and the Department's appeal was dismissed.