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TMI Blog2011 (11) TMI 307X X X X Extracts X X X X X X X X Extracts X X X X ..... sideration not in the nature of statutory fee/levy, then in such cases, service tax would be leviable and it falls within the ambit of taxable service. - Decided against the assessee. - WRIT PETITION NO. 23077 OF 2011 (CESTAT) - - - Dated:- 4-11-2011 - N. KUMAR AND RAVI MALIMATH, JJ. N. Manohar for the Petitioner. ORDER N. Kumar, J. This petition is filed by the Karnataka Government Insurance Department for a declaration that they are not liable to pay service tax, to declare that the Government of India imposing levy of service tax inter alia on General Insurance Business with effect from 01.07.1994 in so far as the petitioner is concerned as ultra vires, arbitrary, unreasonable and to set aside the order 'd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, which are statutory in nature. These functions are performed in terms of specific responsibility assigned to them under the law in force. For examples, the Regional Reference Standards Laboratories (RRSL) undertake verification approval and calibration of weighing and measuring instruments; the Regional Transport Officer (RTO) issues fitness certificate to the vehicles; the Directorate of Biolers inspects and issues certificate for boilers; or Explosive Department; inspects and issues certificate for petroleum storage tank; LPG/CNG tank in terms of provisions of the relevant laws. Fee as prescribed is charged and the same is ultimately deposited into the Government Treasury. A doubt has arisen whether such activities provided by a sovere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is submitted that the nature of activity performed by the petitioner is fully in public interest and it is undertaken as a mandatory and statutory function and therefore, the fee collected by them for performing such activity is in the nature of compulsory levy as per the provisions of the relevant statute and therefore, it does not fall within the mischief of service tax and therefore, they are not liable to pay tax. This has been overruled by three authorities and committed a serious error in levying service tax. 4. The material on record discloses that the Motor Industries Branch of Karnataka Government Insurance Department are the holders of registration under Section 3 of the Insurance Act, 1938 carrying on General Insurance Busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red under Section 70 of the Act. Therefore, a show cause notice came to be issued calling upon to show cause as to why tax should not be levied with interest and penalty. In reply filed, they contend that they are the Government Organisation and party of Government of Karnataka and carrying on the activity of insurance of only Government vehicles and therefore, they are not covered under the service tax and they sought for dropping of the proceedings. On consideration of the said objections, after taking note of the aforesaid provisions, the Assessing Authority held that they are involved in the business of insurance and are holding registration under Section 3 of the Insurance Act, 1938. Therefore, they become service providers as per Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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