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2024 (3) TMI 495 - AT - Service TaxFailure to discharge service tax liabilities - providing Business Auxiliary Service to the Govt. clients - Providing Services to the Ministry of Transport to the Govt. of Assam - Implementing IT Education under Education Department - Imparting IT Education under Rajiv Gandhi Computer Literacy Programme in Schools of Assam. Service provided by the Appellant to the Ministry of Transport to the Govt. of Assam - HELD THAT - The Appellant has performed the functions of Ministry of Transport, which is a statutory function of the Govt. Hence, it is observed that the fees collected by them is not taxable service under the category of Business Auxiliary Service - the Appellant has referred Circular No. 89/7/2006-ST, dated 18.12.2006 issued under F.No. 255/1/2006-CX.4,in support of their contention that they are not liable to pay service tax for these services, but the adjudicating authority has not considered this Circular. There is no finding regarding the non availability of the Circular to the Appellant in the impugned order - the activity performed by the Appellant is a function to be performed by a public authority under the provisions of law and hence it does not constitute a taxable service for the purpose of levy of service tax - no service tax is leviable on such activities. Demand of service tax on the activities of Implementing IT Education under Education Department - HELD THAT - The Department Circular No. 125/7/2010-ST issued under F.No. 354/35/2010-TRU dated 30.07.2010 categorically clarified that Levy and collection of service tax on State Government agencies/ departments implementing Centrally Sponsored Scheme under a central grant, is not legally tenable and therefore in such cases service tax should not be demanded - it is observed that even though the Appellant cited the Circular in their reply to the Notice, the adjudicating authority has not given any finding regarding the applicability of this circular in this case. This clarification clearly covers the Appellant's case. Relying on the Circular, the demand confirmed in the impugned order on this count is not sustainable and accordingly, the same is set aside. Service tax demand on the amount received in respect of Imparting IT Education under Rajiv Gandhi Computer Literacy Programme in Schools of Assam - HELD THAT - The amount has been collected by the Appellant for implementing the Central Govt. sponsored scheme under Rajiv Gandhi Computer Literacy Programme. The Appellant cited the Circular No. 125/7/2010-ST issued under F.No. 354/35/2010-TRU dated 30.07.2010' wherein it has been clarified that Levy and collection of service tax on State Government agencies/ departments implementing Centrally Sponsored Scheme under a central grant, is not legally tenable. It is found that the contents of the Circular are squarely applicable in this case. Relying on the Circular, it is held that the demand confirmed in the impugned order on this count is not sustainable and accordingly, the same is set aside. Since the demand of service tax is not sustainable on the above three categories of services mentioned above, the demand of interest and penalty is also not sustainable. Accordingly, the same is set aside. Appeal disposed off.
Issues Involved:
1. Taxability of services provided to the Ministry of Transport, Govt. of Assam. 2. Taxability of services under the Anandoram Barooah Award Scheme. 3. Taxability of services under the Rajiv Gandhi Computer Literacy Programme. Summary: Issue 1: Taxability of Services Provided to the Ministry of Transport, Govt. of Assam The Appellant argued that the services rendered for issuing Driving Licenses (DL) and Registration Certificates (RC) under the Motor Vehicles Act, 1988, are statutory functions of the government and not taxable under "Business Auxiliary Service." They cited Circular No. 89/7/2006-ST, which clarifies that fees collected for performing statutory functions deposited into the Government Treasury do not constitute taxable services. The Tribunal agreed, observing that the adjudicating authority did not consider this circular. Consequently, the demand for service tax on this count was set aside. Issue 2: Taxability of Services under the Anandoram Barooah Award Scheme The Appellant contended that the services provided under this scheme, aimed at promoting IT education among meritorious students, are not taxable under "Business Auxiliary Service." They referred to Circular No. 125/7/2010-ST, which states that service tax should not be demanded from State Government agencies implementing Centrally Sponsored Schemes under a central grant. The Tribunal found this circular applicable and set aside the service tax demand on this count. Issue 3: Taxability of Services under the Rajiv Gandhi Computer Literacy Programme The Appellant argued that the services provided under this Central Government-sponsored scheme are not taxable under "Business Auxiliary Service." They cited the same Circular No. 125/7/2010-ST. The Tribunal agreed, finding the circular applicable and set aside the service tax demand on this count. Conclusion: The Tribunal held that the services provided by the Appellant in all three cases were not taxable under the category of "Business Auxiliary Service" based on the cited circulars. Consequently, the demands for service tax, interest, and penalties were set aside. The impugned order was modified accordingly, and the appeal was disposed of on these lines.
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