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TMI Blog2022 (2) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... AOR Mr. Parmod Kumar Vishnoi, Adv. Ms. Vanya Gupta, Adv. Mr. Tarun Gupta, AOR For the Respondent : Mr. B. Krishna Prasad, AOR JUDGMENT M.R. SHAH, J. 1. As common questions of law and facts arise in these group of appeals and as such are arising out of the impugned common judgment and order passed by the Customs, Excise and Service Tax Appellate Tribunal, Principal Bench, New Delhi (hereinafter referred to as "CESTAT"), all these appeals are decided and disposed of together by this common judgment and order. 2. That the respective appellants herein are the Krishi Upaj Mandi Samiti (Agricultural Produce Market Committees) located in different parts of State of Rajasthan. The respective appellants are established under the provisions of the Rajasthan Agricultural Produce Markets Act, 1961 (hereinafter referred to as "Act, 1961"). That the State Government constituted various Market Committees (including the appellants herein) in the notified market areas to carry out the functions as envisaged in the Act, 1961 and the Rules made thereunder. That the respective appellants regulate sale of agricultural produce in the notified markets. They charge "market fee" for is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng terms:- "(I) The appellants are liable to pay service tax under the category of "renting of immovable property service" for the period upto 30.06.2012. (II) For the period from 1.7.2012 (Negative List Regime), the appellants are not liable to pay service tax under the said tax entry in respect of shed/shop/premises leased out to the traders/others for storage of agricultural produce in the marketing area. The Negative List will not cove the activities of renting of immovable property for other than agricultural produce. (III) The demands, wherever raised invoking restricted to the normal period. Penalties imposed to extended period, shall be the appellants are set aside. (IV) The threshold exemption available to the small scale service provider in terms of the applicable notifications during the relevant years, shall be extended to the appellant on verification of their turnover." 2.2 Feeling aggrieved and dissatisfied with the impugned common judgment and order passed by the learned CESTAT holding that the appellants - respective Market Committees are liable to pay service tax under the category of "renting of immovable property service" for the period upto 30.06.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel appearing on behalf of the Revenue. 4.1 It is submitted that all the authorities below have rightly held that the activities of allotment/renting/leasing of the shop/shed/platform/land cannot be said to be a mandatory statutory activity and therefore, the Market Committees are not exempted from service tax as per 2006 circular as claimed by the respective Market Committees. 4.2 It is submitted by learned counsel appearing on behalf of the Revenue that Section 9 of the Act, 1961 is an enabling provision and there is no mandatory duty cast upon the Market Committees for allotment/renting/leasing of the shop/land/platform. It is submitted that even under Section 9(2), the words used are "market committee may". It is submitted therefore that it cannot be said that it is a mandatory statutory duty cast upon the Market Committee to allot/lease/rent the shop/land. It is urged that the activities of renting/leasing by the Market Committees to the traders cannot be said to be a statutory activity and therefore the market committee(s) is/are not entitled to claim any exemption under the 2006 circular. 4.3 Learned counsel appearing on behalf of the Revenue has submitted that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ties undertaken falls within the ambit of taxable service. 4.8 It is submitted that in the present case, the activity of renting/leasing performed by the Market Committees cannot be said to be in the nature of a statutory activity and the fee collected cannot be said to be in the nature of a statutory fee/levy. It is contended that the allotment/rent/lease of shop/land is for a consideration and it is not the mandatory statutory activity/duty to provide on rent/lease the shop/platform/land to the traders. 4.9 It is further submitted that even subsequently and on and after 01.07.2012 such an activity is put in the Negative List. That from the aforesaid, the intention of the legislature can be gathered. That if the activities, which are now put in the Negative List were already exempted from service tax, as per the case on behalf of the respective Market Committees in view of 2006 circular, in that case, there was no necessity for the Revenue to put such services in the Negative List subsequently. 4.10 Making the above submissions, it is prayed to dismiss the present appeals. 5. Heard the learned counsel for the respective parties at length. 6. At the outset, it is required to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As per the exemption circular only such activities performed by the sovereign / public authorities under the provisions of law being mandatory and statutory functions and the fee collected for performing such activities is in the nature of a compulsory levy as per the provisions of the relevant statute and it is deposited into the Government Treasury, no service tax is leviable on such activities. In paragraph 3, it is also specifically clarified that if such authority performs a service, which is not in the nature of a statutory activity and the same is undertaken for consideration, then in such cases, service tax would be leviable, if the activity undertaken falls within the ambit of a taxable service. Thus, the language used in the 2006 circular is clear, unambiguous and is capable of determining a defined meaning. 8. The exemption notification should not be liberally construed and beneficiary must fall within the ambit of the exemption and fulfill the conditions thereof. In case such conditions are not fulfilled, the issue of application of the notification does not arise at all by implication. 8.1 It is settled law that the notification has to be read as a whole. If any of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be noted that in so far as sub-section (1) of Section 9 is concerned, the word used is "shall". Therefore, wherever the legislature intended that the particular activity is a mandatory statutory, the legislature has used the word "shall". Therefore, when under sub-section (2) of Section 9, the word used is "may", the activities mentioned in Section 9(2)(xvii) cannot be said to be mandatory statutory duty and/or activity. Under Section 9(2), it is not a mandatory statutory duty cast upon the Market Committees to allot/lease/rent the shop/platform/land/space to the traders. Hence, such an activity cannot be said to be a mandatory statutory activity as contended on behalf of the appellants. Even the fees which is collected is not deposited into the Government Treasury. It will go to the Market Committee Fund and will be used by the market committee(s). In the facts of the case on hand, such a fee collected cannot have the characteristics of the statutory levy/statutory fee. Thus, under the Act, 1961, it cannot be said to be a mandatory statutory obligation of the Market Committees to provide shop/land/platform on rent/lease. If the statute mandates that the Market Committees have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Market Committee Fund. Even it is the case on behalf of the appellants that the fees collected, which will be deposited in the Market Committee Fund will be utilized by the Market Committee for expanding/benefit of the Market Committee etc. 11 Even otherwise, it is to be noted that on and after 01.07.2012, such activities carried out by the Agricultural Produce Market Committees is placed in the Negative List. If the intention of the Revenue was to exempt such activities of the Market Committees from levy of service tax, in that case, there was no necessity for the Revenue subsequently to place such activity of the Market Committees in the Negative List. The fact that, on and after 01.07.2012, such activity by the Market Committees is put in the Negative List, it can safely be said that under the 2006 circular, the Market Committees were not exempted from payment of service tax on such activities. At this stage, it is required to be noted that it is not the case on behalf of the Market Committees that the activity of rent/lease on shop/land/platform as such cannot be said to be service. However, their only submission is that the Market Committees are exempted from levy of se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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