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TMI Blog2018 (2) TMI 1498X X X X Extracts X X X X X X X X Extracts X X X X ..... or a consideration which is not in the nature of statutory fee, service tax would be leviable if the activity undertaken otherwise falls within the ambit of taxable service. Section 14 of the MID Act provides that the function of the MIDC is not only to develop industrial areas but to establish and manage industrial estates. The role of MIDC is not limited only to establishing industrial estates and allotting the plots or buildings or factory sheds to industrial undertakings. The function and obligation of the MIDC is also to manage and maintain the said industrial estates as provided in Section 14. Therefore, it is the statutory obligation of the MIDC to provide amenities as defined in clause (a) of Section 2 of the MID Act to the industrial estates established by it. Thus, it is the statutory obligation of MIDC to provide and maintain amenities in its Industrial estates such as roads, water supply, street lighting, drainage, etc. As provided in the circular dated 18th December, 2006, for providing amenities to the plot holders, the service fees or service charges collected by MIDC are obviously in the nature of compulsory levy which is used by MIDC in discharging statutory obliga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how cause notice is that service charges were collected from the plot owners in consideration of having provided them various facilities including the maintenance, management and repairs of the facilities in the MIDC Industrial area. By an OrderinOriginal dated 30th August, 2013, the Additional Commissioner of Central Excise, Customs and Service Tax, Nashik held that the services rendered by MIDC fall in the category of "management, maintenance and repairs" and therefore, the demand of service tax amounting to ₹ 31,58,157/was confirmed. This demand was confirmed in an Appeal preferred by the respondent before the Commissioner (Appeals). An appeal against the said judgments and orders was preferred by the Respondent before Customs, Excise and Service Tribunal, Western Zone, Mumbai (for short "the Appellate Tribunal"). The Appeal along with other connected five Appeals were allowed by the Appellate Tribunal by a judgment and order dated 4th September, 2014. These Appeals are preferred being aggrieved by the said common judgment and order. 3 The submission of the learned counsel appearing for the Appellant is that the service charges are collected by the MIDC from the allottees ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te what is set out in the circular dated 18th December, 2006 bearing No.89/7/2006. Clauses 2 and 3 of the said circular read thus : "2. The issue has been examined. The Board is of the view that the activities performed by the sovereign/ public authorities under the provision of law are in the nature of statutory obligations which are to be fulfilled in accordance with law. The fee collected by them for performing such activities is in the nature of compulsory levy as per 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, servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er corporate bodies or institutions, or with Government or local authorities, or on an agency basis, in furtherance of the purposes for which the Corporation is established and all matters connected therewith." (emphasis added) 9 Hence, one of the statutory functions of MIDC is to establish and manage the industrial estates at places selected by the State Government. Clause (a) of Section 2 of MID Act defines amenity which reads thus : "2(a) "amenity" includes road, supply of water or electricity, street lighting, drainage, sewerage, conservancy and such other convenience as the State Government may, by notification in the Official Gazette specify to be an amenity for the purpose of this Act." 10 In the case of Ramtanu Cooperative Housing Limited and another, the Apex Court was dealing with the issue of constitutional validity of MID Act. In paragraphs 15 and 16, the Apex Court held thus : "15. The pith and substance of the Act is establishment, growth and organisation of industries, acquisition of land in that behalf and carrying out the purposes of the Act by setting up the Corporation as one of the limbs or agencies of the Government. The powers and functions of the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese moneys arise not out of any business or trade but out of sole purpose of establishment, growth and development of industries." (emphasis added) 11 The Apex Court categorically held that functions and powers of MIDC indicate that the said Corporation is acting as a wing of the Government. In the case of Managing Director, Haryana State Industrial Development Corporation, the Apex Court was considering the role played by Haryana State Industrial Development Corporation. The Apex Court held that the said Corporation discharges sovereign functions. The Apex Court also held that considering the objects and purport for which the said Corporation of Haryana has been constituted, the function discharged by the Corporation must be held as Governmental function. 12 We have already referred to Section 14 of the MID Act which provides that the function of the MIDC is not only to develop industrial areas but to establish and manage industrial estates. The role of MIDC is not limited only to establishing industrial estates and allotting the plots or buildings or factory sheds to industrial undertakings. The function and obligation of the MIDC is also to manage and maintain the said indu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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