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TMI Blog2011 (5) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... f the government. Just because the organization giving such service is constituted under a statute of the Parliament the activity does not become a statutory function. Further the consideration to be paid is not in the nature of fees to recover the cost for doing such service but in the nature of a commercial consideration. In the case of fees charged for testing the equipment to be used on Indian railways system, the matter is on a more disputable footing. Therefore, we are of the view that Appellant has made out a prima facie case in their favor in the matter of time bar. We order for deposit of Rs.50 lacs within three months from the date of this order, for admission of Appeal. - ST/ 86/2010 - ST/304/2011 - Dated:- 25-5-2011 - Archana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) Handling Equipment/System 4. Further Private Operators have been sanctioned licenses to acquire equipment from private manufacturers and operate them in the railway system. These operators purchase such equipment by placing necessary orders on manufacturers. 5. Manufacturers need technical specifications so that such equipment can be used by Indian Railways. Such specifications are provided by the Appellant for appropriate consideration. Further before these wagons are put on the railway system, such equipment are required to be inspected and certified by the Appellant to ensure the safety of the operations of these equipment in Indian Railway systems. The Appellant charges fees for such certification. 6. The Revenue has made out a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcular 89/7/2006-ST dated 18-12-2006 clarifying that fees collected by Public Authorities while performing statutory functions and duties under provisions of Law is not taxable. (b) Substantial portion of the demand is time-barred. They contest that as a government organization they cannot be accused of any intention to evade tax especially when they were acting under the bonafide belief of the principle conveyed by CBEC's circular dated 18-12-2006. It is also pointed out that the Commissioner herself has accepted their stand that they had no intention of evading tax and has refrained from imposing any penalty. 10. CBEC's circular dated 18-12-2006 referred to above reads as under: "Sub: Applicability of service tax on fee coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant statute and if is deposited into the Government treasury. Such activity is purely in public interest and it is undertaken as mandatory and statutory function. These are not in the nature of service to any particular individual for any consideration. Therefore, such an activity performed by a sovereign/public authority under the provisions of law does not constitute provision of taxable service to a person and therefore, no service tax is leviable on such activities. 3. However, if such authority performs a service which is not in the nature of statutory activity and the same is undertaken for a consideration not in the nature of statutory fee/levy, then in such cases, service tax would be leviable if the activity undertaken fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nish the amount that will be within the period of limitation. Incidentally it is also noticed that the Appeal is filed without a copy of the Show Cause Notice and the relevant worksheet. However from para 11 of the impugned order, it is seen that out of total duty demand of Rs.8.54 crores confirmed by the order, Rs.3.40 crores is on account of Technical Inspection and certification. On a rough reckoning it is taken that one fifth of the demand is within the period of one year before issue of SCN. 14. On the basis of the above prima facie views we order that the Appellant may make a deposit of Rs.50,00,000/- (Rs. Fifty lakhs) within three months from the date of this order, for admission of Appeal. Subject to deposit of this amount there s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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