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TMI Blog2010 (6) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... d - decided in favor of assessee. - Order-in-Appeal No. 19/2010/GOA/CEX/GSK - - - Dated:- 24-6-2010 - Dr. G. Sreekumar Menon, J. Shri C.A. Parimal Kulkarni, Consultant and Yeshwant D. Gaude, for the Appellant. None, for the Respondent. ORDER The Government provides grant to the KTC to construct but stand. On construction of the bus stand, the tame are to be maintained through revenue grants to be received from the Government. To minimise the grant, the State Government hat authorised the District Magistrate to levy stand feet. The Stand fees are a statutory levy of the local State Government. The directions for the stand feet are issued and regulated by the office of the District Magistrate. Only the collection of the stand fees is performed by KTC. This in turn reduces the grant that the State Government makes available to KTC for maintaining the bus Stands. 2. Collection of stand fee is not for any specific service rendered by them, but is a flat rate of charge to one category of buses namely, private bus operators, it cannot be said that the amount so collected is by way of service charge. Therefore, no service tax is payable for the stand fees collected by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tices to the extent of Rs. 16,84,968/- (on cum-tax value basis) including cess plus interest and penalty u/s 77. (vii) It is the contention of the department that the stand fees collected is for providing infrastructural support, for furtherance of business of bus operation using the bus stand facility. Therefore the fee collected should suffer service tax under Section 64(104c) of the Finance Act, 1994 as support services for business or commerce . (viii) It is the contention of the department that the stand fee collected is not declared in the returns filed and the same was not brought to the notice of the department, thus the appellants have suppressed the relevant facts in the case under adjudication and extended period of 5 years would be applicable in the said case under Section 11A(1) of the Central Excise Act, 1944. 4. Appellant contends that : (i) Service tax on Stand fee is not made liable under any category of service tax and it cannot be brought to tax under business support services residuary clause. (ii) Bus stand are created as a public utility services and not as support services for private bus operators. Thus, service tax is not applicable under busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all under service tax law, the exercise of stretching it to a particular category beyond its accepted limits would not make it a taxable service. 7. Business Support Services : Business entities outsource a number of services for use in business or commerce. These services include transaction processing, routine administration or accountancy, customer relationship management and tele-marketing. There are also business entities which provide infrastructural support such as providing instant offices along with secretarial assistance known as Business Centre Services . It is proposed to tax all such outsourced services. If these services are provided on behalf of a person, they are already taxed under Business Auxiliary Service. Definition of support services of business or commerce gives indicative list of outsourced services. Accordingly, the circular has clarified the kind of service it has sought to cover under the category of support services of business or commerce. It has sought to tax those business entities whose purpose is to provide business support services or infrastructure support services on a principal to principal basis. 8. As per Section explanation 65(104c) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : (a) To make it safe, smooth and convenient for the public to utilise the transportation facilities; (b) To ensure that the bus is parked at a known place everyday such that the public is able to board or leave the bus; It prevent passengers trying to board or alight in hazardous situations such as intersections, etc. (c) to ensure correct running to the timetable; (d) A passenger cannot be expected to keep a look out everywhere for a bus. A bus stop means that the passenger only needs looking out at the approach of each bus parked; (e) Having bus parked rather than a free for all means the passenger will group themselves when boarding, which reduces time spent at boarding; (f) To ensure that the bus operators are well regulated avoiding irregular parking places that could cause accidents or confusion to the public; 15. Stand fees are stand alone charges collected basically for enhancing the revenue and no services are rendered in exchange thereof. Thus value of service as required under Section 67 is not present in the said transaction and the said fees are therefore not taxable. 16. Stand fees are decided by the Government : (a) Directions of Government : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dmittedly all busses (government as well as private) leaving the bus stand and arriving from outside receive the same services and if any service is to be charged, the same must be charged on all. (h) The facts and circumstances of the case and the evidence clearly prove beyond doubt that the stand fee collected is only for enhancing the revenue of the KTC and not for any service rendered to the private bus operators. (i) In the case of M/s. Cochin International Airport Ltd., 2009 (16) S.T.R. 401 (Ker.) = 2009-TIOL-710-HC-KERALA-St., the Hon ble Kerala High Court has held that user fee collected by airport is not for any service - same is not taxable under service tax. In this case the airport was arbitrarily charging a user fee of Rs. 500 to each outgoing passenger. This was a pure revenue collection measure and there was no service provided to the passenger in exchange of this consideration. (j) Since collection of stand fee is not for any specific service rendered by them, but is a flat rate of charge to one category of busses namely, private bus operators, it cannot be said that the amount so collected is by way of service charge. Therefore, no service tax is payable for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of parking fee which is specifically excluded under rental of immoveable property services. The KTC (under Government grants and instructions) creates the infrastructure for the public as public utility services of the state Government. The KTC also does not provide any business support services in respect of such infrastructure and hence the said stand fee would not amount to provision of infrastructure support services under support services for business or commerce . Extended period of limitation cannot be invoked. Therefore, the demand is time barred : 22. It is submitted that even assuming that the appellant is liable to pay service tax under support services for business , the extended period of limitation cannot be invoked and therefore, the demand is time barred. (a) As per Section 73(1) of the Act, in a normal case a SCN can be issued at any time within one year from the relevant date. Proviso to Section 73(1) of the Act provides that SCN can be issued at any time within 5 years from the relevant date, if service tax was not paid or levied by reason of fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... returns or non-payment of service tax does not amount to suppression: It is submitted that mere non-registration or non-filing of returns or non-payment of service tax, without any deliberate intention to withhold/ suppress information from the Department, cannot justify the invocation of the extended period of limitation. In this regard, reliance is placed on the following cases : (i) Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) (ii) CCE v. Chemphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.) (iii) Gopal Zarda Udyog v. CCE - 2005 (188) E.L.T. 251 (S.C.) (iv) Lubri-Chem Industries Ltd. v. CCE - 1994 (73) E.L.T. 257 (S.C.) (g) In this regard the appellant relies on the judgment of the Hon ble Supreme Court in the case of Anand Nishikawa Co Ltd v. CCE - 2005 (188) E.L.T. 149 (S.C.), wherein the court held as under : (i) 28. Relying on the aforesaid observations of this Court in the case of Pushpam Pharmaceutical Co. v. Collector of Central Excise, Bombay, [1995 Suppl. (3) SCC, 462], we find that suppression of facts can have only one meaning that the correct information was not disclosed deliberately to evade payment of duty, when facts were known to both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imself against such allegations. A proposal to invoke extended period on the appellant without disclosing the grounds thereof, will tantamount to violation of the principles of natural justice. In this regard, reliance is placed on the following decisions : (i) Hindustan Foam Industries v. CCE - 1989 (44) E.L.T. 350 (Tri.) (ii) Zee Telefilms Ltd. v. CCE - 2006 (4) S.T.R. 349 (Tri.-Mumbai) (iii) Sriram Pistons Rings Ltd. v. CCE - 1983 (14) E.L.T. 1927 (iv) Geeta Engg. Works v. CCE - 2004 (177) E.L.T. 751 (Tri. - Del.) (v) Klockner Windsor India Ltd. v. CCE - 1998 (101) E.L.T. 348 (Tri.) (vi) CCE v. Ballarpur Industries Ltd. - 2007 (215) E.L.T. 489 (S.C.) (vii) CCE v. Brindauan Beverages (P) Ltd. - 2007 (213) E.L.T. 487 (S.C.) (viii) Duncans Industries Ltd. v. CCE - 2006 (201) E.L.T. 517(S.C.) (ix) Kaur Singh v. CCE - 1997 (94) E.L.T. 289 (S.C.) (k) In such cases, allegation of suppression of facts against the appellant with intent to evade payment of service tax is not sustainable. (l) Based on the above, it is submitted that the demand for the period April, 2006 to September, 2007 is time barred. The SCN is liable to be set aside on this ground itself. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bre Foils Ltd. v. CCE - 2005 (190) E.L.T. 352 (Tri.-Mumbai) (ix) ITEL Industries P. Ltd. v. CCE - 2004 (163) E.L.T. 219 (Tri.-Bang.) No. Case Law 1 Cochin International Airport Ltd , 2009 (16) S.T.R. 401 (Ker.) = 2009-TIOL-710-HC-KERALA-ST) 2 Hutchison Telecom Ltd . v. CCE - 2006(1) S.T.R. 80 (Tri. - Del) 3 Padmini Products v. CCE - 1989 (43) E.L.T. 195 (S.C.) 4 CCE v. Chemphar Drugs Liniments - 1989 (40) E.L.T. 276 (S.C.) 5 Gopal Zarda Udyaog v. CCE - 2005 (188) E.L.T. 251 (S.C.) 6 Lubri-Chem Industries Ltd . v. CCE - 1994 (73) E.L.T. 257(S.C.) 7 Anand Nishibawa Co Ltd v. CCE - 2005 (188) E.L.T. 149 (S.C.) 8 Hindustan Foam Industries v. CCE - 1989 (44) E.L.T. 350 (Tri.) 9 Zee Telefilms Ltd. v. CCE - 2006 (4) S.T.R. 349 (Tri.-Mumbai) 10 Sriram Pistons Rings Ltd . v. CCE -1983 (14) E.L.T. 1927 11 Geeta Engg.Works v. CCE - 2001 (177) E.L.T. 751 (Tri.-Del.) 12 Klochner Windsor India Ltd . v. CCE - 1998 (101) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether service tax is applicable under business support services? (iv) At the most these stand fees are in the nature of parking fees which are again exempt under renting of immoveable property services. (v) Whether interest is applicable under Section 75 of the said act if the service itself is not taxable. (vi) Whether the appellants are entitled to a relief under Section 80 from penalties levied under Section 77. 24. Bus terminal services have not yet been made taxable under service tax as has been done in case of port services or airport services. The CBEC has framed the service tax provisions relating to : (a) Airport services (b) Port services (water) (c) Road transport services (d) Rail transport services 25. Out of the above. Port services were made taxable with effect from 16th July, 2001. Minor ports were later added to that category. Airport services were made taxable with effect from 10th September, 2004. As on date such provisions have not been created with respect to Bus terminal services and Rail services. 26. In the case law of Commissioner Central Excise v. M/s. Cochin International Airport Ltd., reported in 2009 (16) S.T.R. 401 (Ker.) = 2007- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar fee collected by the Khozikode Airport Authority is without any justification. Even though appeals was filed against the said judgment before the Division Bench, we are told that the Calicut Airport discontinued collection of users fee. Following this, the respondent has also stopped collection of users fee. The facts and circumstances of the case and evidence clearly prove beyond doubt that the users fee collected is only for enhancing the revenue of the airport and not for any service rendered to outgoing international passengers. Section 67 defining value of taxable services for charging service tax says that the value of service shall be gross amount charged by the service provider for the service charged to the recipient. Since collection of users fee is not for any specific service rendered by them, but is a flat rate charged to one category of passengers namely, outgoing international passengers, it cannot be said that the amount so collected is by way of service charged. We, therefore, hold that the Tribunal rightly held that no service tax is payable for users fee collected by the respondent. The appeals are accordingly dismissed . 27. In the instant case the Go ..... X X X X Extracts X X X X X X X X Extracts X X X X
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