2023 (7) TMI 258 - AT - Service Tax

Levy of Service Tax - tolling operations undertaken by the appellant - contravention of provisions of Section 68, 69 70 of the Finance Act, 1994 and Rules, 4, 5, 6 and 7 of Service Tax Rules, 1994 by providing the said taxable services without obtaining registration and without payment of service tax - HELD THAT - This issue has been considered by various benches of the Tribunal and in the appellant s own case for the earlier period it has been held that the collection of toll by the assessee would not be considered as Business Auxiliary Service provided to NHAI as the assessee is not rendering any service which is incidental or auxiliary on behalf of NHAI and the NHAI is not undertaking any business activity. In the appellant s own case PNC CONSTRUCTION CO. LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH 2012 (12) TMI 878 - CESTAT, NEW DELHI , the Tribunal has held that the activities of the appellants in respect of toll fee collection cannot be held to be a service provided to NHAI falling under the category of BAS. The impugned order is not sustainable in law - Appeal allowed.

Summary

Issues:
The appeal challenges the confirmation of demand for Service Tax under the proviso to Section 73(1) of the Finance Act, 1994, along with penalties imposed under Sections 76, 77, and 78 of the Act.

Facts:
The appellant was alleged to have contravened provisions of the Finance Act, 1994 by providing taxable services without registration and payment of service tax. The appellant collected toll tax at "Doraha Toll Plaza" on behalf of NHAI, for which they failed to pay service tax. An enquiry was conducted, and a show cause notice was issued. The adjudicating authority confirmed the demand of service tax, interest, and penalty. The appellant appealed to the Commissioner (Appeals), who upheld the original order.

Appellant's Argument:
The appellant argued that tolling operations were not covered under Business Auxiliary Service as they were not incidental or auxiliary to NHAI's activities. They cited various decisions supporting their position. They also contended that the contract was composite, and tolling operations alone should not be subject to service tax. The appellant raised the issue of time bar due to the absence of mala fide intent.

Department's Response:
The Authorized Representative reiterated the findings in the impugned order.

Tribunal's Decision:
The Tribunal found that tolling operations by the appellant did not constitute Business Auxiliary Service provided to NHAI, based on previous decisions. The Tribunal set aside the impugned order and allowed the appeal, providing consequential relief to the appellant. The Tribunal noted that the issue had been settled by various benches, making it non-resintegra.

Conclusion:
The Tribunal held that the demand for service tax under Business Auxiliary Service was not sustainable, setting aside the impugned order and allowing the appeal of the appellant with consequential relief, if any.