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TMI Blog2014 (5) TMI 726X X X X Extracts X X X X X X X X Extracts X X X X ..... considered as mandatory and statutory functions provided by a sovereign/public authority. - the activities of the appellant are not covered by the said Circular dated 18.12.2006 and are chargeable to Service Tax under the Technical Inspection and Certification Service. - Decided against the assessee. Extended period of limitation - Held that:- Service became taxable with effect from 1.7.2003 and the appellant started collecting the same with effect from 1.4.2005 and the amount collected by the appellant was initially kept in bank account which alongwith interest have already been deposited with the revenue. Keeping in view the fact that the service became chargeable to service tax only with effect from 1.7.2003, the fact that appellant is an organization controlled by the Government of Maharashtra, the certification of the seed is done by the appellant as per the provisions of the Seeds Act, 1966 read with Seeds Rules, 1968, the said Act provides for regulating the quality of certain seeds for sale, we do not find that ingredients of proviso to Section 73 of the Finance Act, 1994 are present in the facts and circumstances of the case. Therefore, the demand within the normal peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - collected by them during the period 2005-06. The notice also proposed to recover interest under Section11DD on the said amount. The case was adjudicated by the impugned order wherein the adjudicating authority confirmed the demand, confirmed recovery of Rs. 77,12,518/- under Section 11D, interest under Section 11DD, interest on the demand of Rs. 1,52,53,807/- under Section 75 of the Finance Act, 1994. Penalties under Section 76, 77 and 78 of the Finance Act, 1994 were also confirmed. 4. The appellants are before us against the said order. 5. Heard both sides. 6. The learned counsel for the appellant's main contention was that the appellant is doing the certification work as envisaged under the Seeds Act, 1956 and the Rules made thereunder. According to the learned counsel seeds cannot be sold without a certification, and under the Act and the Rules the appellants are certifying agency who are required to ensure minimum limits of germination and purity etc. and they start inspection right from the time of growing of such seeds. The learned counsel took us through the Seeds Act and the Rules made thereunder to emphasize the point that the appellants are doing statutory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.12.2006 is very specific to the sovereign and public authorities and is relating to mandatory and statutory functions. The service provided by the appellant cannot be considered as a mandatory and statutory function, nor the appellant is a sovereign/public authority. The cases discussed in the Circular are entirely different in nature. The learned A.R. also argued that at the time of introduction of service tax on technical inspection and certification' Board vide Circular NO. 59/8/2003-ST dated 20.6.2003 (para 25) has very clearly stated that such services would be chargeable to service tax. He also argued that it is only vide Notification NO. 10/2010-ST dated 27.2.2010 that the Government has decided to grant exemption to taxable services provided by the Central or State Seeds Certification Agencies. If the appellant was a sovereign/public authority and was carrying out the mandatory and statutory function there were no need to issue such a notification. The learned A.R. also argued that while it is true that a clarification was issued by the Commissioner of Service Tax vide letter dated August 01,2006 on the issue, however, the said clarification was withdrawn on 27.10.20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of the relevant statute, and it 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 falls within the ambit of a taxable service. 4. Trade and field formations may be advised accordingly. The appellant is a Society registered under the Societies Registration Act. In our careful consideration we do not consider that Activities of the appellant can be considered as mandatory and statutory functions provided by a sovereign/public authority. 10. We also see the clarification provi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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