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TMI Blog2019 (6) TMI 1328X X X X Extracts X X X X X X X X Extracts X X X X ..... d private parties to vend liquor in the shops, which are annexed to the retail vending shops. It is no doubt true that the Retail Vending Rules empower the appellant to vend liquor not only in the shops established by them, but also in the bars. But, the factual scenario in the State of Tamil Nadu is that in the retail vending shops, vending alone is permissible and in the bars attached to the retail vending shops, a facility is provided for consumption of liquor thereby the liquor purchased in the retail vending shops is taken by the customer to be consumed inside the premises and this is with a view to prevent the customer to consume liquor in the open area causing nuisance to the general public. The use of the expression 'running bars' in Rule 9A of the Retail Vending Rules, in our considered view, is a misnomer. This is so because the Retail Vending Rules also permit the licences to be used by certain categories of establishments where they are permitted to vend liquor and allow the persons to consume the liquor within the same premises. Some examples are certain categories of hotels, resorts, etc. Therefore, the grant of privilege in the instant case, which we are p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to pay service tax on 1% of the revenue retained by them as agency commission can be extended for the period from July 2012 to March 2013 - the third substantial question of law is answered against the assessee. Appeal dismissed - decided against appellant. - Civil Miscellaneous Appeal Nos.2206 to 2238 of 2018 - - - Dated:- 24-10-2018 - MR T. S. SIVAGNANAM AND MRS. V. BHAVANI SUBBAROYAN, JJ. For The Appellant : Mr.Vikram Vijayaraghavan For The Respondent : Mrs. Hema Muralikrishnan, SPC COMMON JUDGMENT ( Judgment was delivered by T.S.SIVAGNANAM, J) Mrs. Hema Muralikrishnan, learned Senior Panel Counsel accepts notice for the respondent in all the appeals. We have heard the learned counsel on either side. 2. These appeals, by the Tamilnadu State Marketing Corporation Limited (TASMAC), are directed against the common final order passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench, Chennai (for short, the Tribunal) in ST/41645-41677/2015 dated 03.4.2018 raising the following substantial questions of law : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been devolved on licencees, it still continues to remain as a statutory right and is not exigible to service tax. Therefore, to that extent, the learned counsel for the appellant would submit that the reason assigned by the Tribunal has to be tested for its correctness. 6. So far as the second period is concerned i.e., from July 2012 to March 2013, the Tribunal held against the appellant and made them liable to pay service tax on the ground that after introduction of Negative List with effect from 01.7.2012, Section 65B(44) of the Finance Act, 1994 was given a broader scope by defining the expression 'service' to mean 'any activity carried out by a person for another for consideration'. Therefore, the appellant has challenged the levy of service tax for the said period from July 2012 to March 2013. 7. With regard to the period from April 2013 to till date, the appellant is not aggrieved in the sense that the Tribunal, taking note of the amendment to the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003 (for brevity, the Retail Vending Rules) by insertion of Rule 9A, held that the appellant is liable to pay service tax o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order passed by the Tribunal for the period from July 2012 to March 2013. While doing so, we will also consider as to whether the appellant is justified in contending that the activity done by the assessee is a devolution of statutory right and therefore, the assessee is not exigible to service tax. Incidentally, we are also called upon to decide the issue as to whether the benefit granted to the appellant by the Tribunal from April 2013 to till date making them liable only to the extent of 1% of the revenue generated can be extended for the period from July 2012 onwards. 11. Firstly, we take up for consideration the contention of the learned counsel for the appellant/assessee that the right, which has been granted by virtue of the licence issued to private parties for running the bar, is a devolution of a statutory right and that therefore, the assessee is not exigible to service tax. We have examined the relevant Rules and in particular, Rule 9A, which was inserted to the Retail Vending Rules in March 2013. The insertion of Rule 9A of the Retail Vending Rules was pursuant to a proposal sent by the Commissioner of Prohibition and Excise dated 22.3.2013 wherein he h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant to vend liquor not only in the shops established by them, but also in the bars. But, the factual scenario in the State of Tamil Nadu is that in the retail vending shops, vending alone is permissible and in the bars attached to the retail vending shops, a facility is provided for consumption of liquor thereby the liquor purchased in the retail vending shops is taken by the customer to be consumed inside the premises and this is with a view to prevent the customer to consume liquor in the open area causing nuisance to the general public. 16. Therefore, the use of the expression 'running bars' in Rule 9A of the Retail Vending Rules, in our considered view, is a misnomer. This is so because the Retail Vending Rules also permit the licences to be used by certain categories of establishments where they are permitted to vend liquor and allow the persons to consume the liquor within the same premises. Some examples are certain categories of hotels, resorts, etc. Therefore, the grant of privilege in the instant case, which we are presently dealing, is for the purpose of selling eatables and collecting empty bottles and cartons in the bars, which are adjacent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... performed for the period in dispute can never be treated as a sovereign function or a statutory right or an activity performed by a Public Authority under the authority of law. The Tribunal also took note of the circulars issued by the Central Board of Excise and Customs dated 23.8.2007 and 18.12.2006, which clarified that if a Sovereign/Public Authority provides a service, which is not in the nature of a statutory activity and if the same is undertaken for a consideration, which is not a statutory fee, then, in such cases, service tax would be leviable as long as the activity undertaken falls within the scope of taxable service as defined. Even when a Governmental Authority performs a service, which is not in the nature of a statutory activity, the same has to be held leviable to service tax and this view is supported by the decision of the Karnataka High Court in the case of Karnataka Government Insurance Department Vs. ACCE, Bangalore [reported in (2012) 26 STR 521]. This decision has been followed by a learned Single Judge of the High Court of Kerala in the case of Kerala State Insurance Department Vs. Union of India [reported in (2012) 28 STR 337]. The High Court of A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erely explains the powers explicitly and is consequently retrospective thereby the decision of the Tribunal in holding the appellant not exigible to service tax from April 2013 must apply for the period starting from July 2012, at best, at the rate of 1%. 25. In the preceding paragraphs, we have referred to Rule 9A of the Retail Vending Rules. The said Rule was notified in exercise of the powers conferred under Sections 17C, 17D, 21 and 22D read with Section 54 of the Tamil Nadu Prohibition Act, 1937. By virtue of this Notification, there has been amendment to the Retail Vending Rules by insertion of a new Rule namely Rule 9A. This Notification was pursuant to examination of the proposal given by the Commissioner of Prohibition and Excise. Thus, when a new Rule is inserted, it would take effect from the date, on which, it is notified unless the Notification specifically fixes an anterior date. In the relevant Notification, there is no indication that it is retrospective. Therefore, we cannot read anything into the Notification, which is not contained therein. The Notification is, therefore, held to be prospective. Secondly, the Notification can never be held to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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