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TMI Blog2022 (8) TMI 610X X X X Extracts X X X X X X X X Extracts X X X X ..... an Development Authority in terms of Section 4 of Uttar Pradesh Urban Planning and Development Act, 1973 for development work of Haridwar Roorkee prior to creation of state of Uttrakhand with the objects to promote and secure the development of the area and accordingly, to execute works in connection with the supply of water and electricity, sewage and to provide and to maintain other services and amenities for purposes of development. There is no denial that the appellant therefore is a statutory authority - no Revenue benefits have been incurred by the appellant from the amounts of several different kind of fees collected by them, the entire amount so received been deposited in the Government Treasury, irrespective for any specified purpose. Reliance on the Circular No. 192/02/2016 dated 13.04.2016 is absolutely wrongly on the part of the Adjudicating Authority. It is Circular No. 89/7/2006-ST dated 18.12.2006 according to which the fee and charges since are collected as per statute, they cannot be termed as consideration - the confirmation of demand of Rs. 2,31,84,581/- as a liability towards various amount received by the appellant on account of various fee is not sustain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w cause notice is definitely barred by time. Appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 51464 of 2019 [DB] - FINAL ORDER No. 50700/2022 - Dated:- 5-8-2022 - MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) AND DR. RACHNA GUPTA, MEMBER (JUDICIAL) Mr. R.M. Saxena, Advocate for the Appellant Mr. Ravi Kapoor, Authorised Representative for the Respondent ORDER Present appeal has been filed to assail the Order-in-Original No. 08/Commr./DDN/2019 dated 26.03.2019, vide which the demand of service tax amounting to Rs.2,31,84,581/- for the Financial year 2012-13 to 2014-15 has been confirmed to have been recovered from the appellant along with interest and the penalty of equal amount, in addition, penalty under Section 77 has also been imposed. However, no penalty upon Dr. Tanzeem Ali, Chief Finance Officer has been imposed under Section 78 A. The facts in brief relevant for the present adjudication are as follows: 2. Appellant is providing services in relation to construction of residential complex service, renting of immovable property service etc. Department observed that the appellant has neither taken the registration with the Service ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Commissioner of Police, Jodhpur Vs. Commissioner of C.Ex. S.T., Jaipur-II reported as 2017 (048) STR 0275 (Tri.-Del.). The decision of CCE, Nashik Vs Maharashtra Industrial Development Corporation reported as 2018 (9) GSTL 972 (HC-Bom) has also been impressed upon, wherein it was held that the activities performed by sovereign or public authorities under the provisions of law in nature of statutory obligations for which there was compulsory levy will not amount to be called as service. Hence, no liability shall arise for discharging such services. It is submitted that the adjudicating authority below has failed to take into consideration the above submissions of the appellant and even the relied upon case law. Order accordingly, is prayed to be set aside. Appeal is prayed to be dismissed. 5. While rebutting the submissions learned DR has relied upon the order under challenge. It is submitted that from the alleged activities, it is clear that though the activities are undertaken by the Government or local authority but against consideration. Hence, constitute a service the amount charged for performing such activity shall be liable to service tax. Various fee charged by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion towards providing a service by the appellants. 8. Issue No.1: 8.1 For the purpose, definition of service and that of consideration shall be relevant. Section 65 B (44) of Finance Act, 1994 defines service to mean as follows: (44) service means any activity carried out by a person for another for consideration, and includes a declared service, but shall not include- (a) an activity which constitutes merely,- (i) a transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (iii) a transaction in money or actionable claim; (b) a provision of service by an employee to the employer in the course of or in relation to his employment; (c) fees taken in any Court or tribunal established under any law for the time being in force. 8.2. Consideration is something of value given by both parties to a contract that induces them to enter into an agreement to exchange mutual performances. Thus consideration is a benefit which must be bargained for between the parties and is essential reason for a party entering into a contract. Consideration must either be a value exchanged for performance or pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is absolutely wrongly on the part of the Adjudicating Authority. It is Circular No. 89/7/2006-ST dated 18.12.2006 according to which the fee and charges since are collected as per statute, they cannot be termed as consideration. The Circular resides as follows: 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. Another circular 96/7/2007-ST, dated 23-8-2007 has clarified on the issue whether such activities of a sovereign/public authority, performe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fee, is directly related to regulation of land and urban planning including town planning while stacking fee is for disposal of solid wate management. The form fee, information fee are performed as statutory duties assigned to HRDA and Harilok maintenance fee is against street lighting and sewage management and misc. receipts are against fee charged for providing various documents under RTI and other statutory functions. All these functions are covered under S. No 25 of the notification 25/2012, therefore, Appellant is entitled to exemption. We rely on the judgments in case of Karnataka State Industrial Area Dev Board Vs CCE, Banglore North 2020 (40) GSTL 33 (Tribunal), wherein Hon'ble Tribunal decided we are of the considered opinion that the appellant is a statutory body discharging the statutory function as per the statute KIAD Act, 1966 and hence are not liable to pay service tax in view of the ratios of the various decisions cited the supra Para 8 of the order. The judgment of Hon'ble High court of Bombay in case of CCE, Nashik Vs Maharashtra Industrial Development Corp 2018 (9) GSTL 972 (HC-Bom) wherein department had raised similar issue of activities perform ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set aside. 10. Issue No. 2: 10.1 To adjudicate it is necessary to see whether this income was purely on account of discharging a sovereign function or was an income in the form of commercial gain for appellant itself. No doubt the appellant is a statutory body but as evident from their names the amount received as lease rent and maintenance service, these are liable to service tax. We draw our support from the decision of Hon ble Allahabad High Court in the case of Greater Noida Industrial Development Authority wherein the Allahabad High Court held that if the sovereign/public authority provides a service, which is not in the nature of statutory activity and the same is undertaken for a consideration (not statutory fee), then in such cases, service tax would be leviable as long as the activity undertaken falls within the scope of a taxable service and defined in Finance Act, 1994. We observe that amounts received by appellant towards free hold lease rent, maintenance charges are received as quid pro quo to providing Renting and Maintenance Services, hence are the monetary benefits to the appellant. Irrespective it being statutory body, these amounts are liable to tax. We furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, suppression of facts or contravention of any provision of the Finance Act, 1994 or any rule made their under with intent to evade service tax, the extended period of time while issuing said show cause notice cannot be invoked. Hon ble Apex Court also in the case of NRB Bearings Ltd. Vs. Commissioner of Customs, Mumbai reported as 2015 (322) E.L.T. 0599 (S.C) has held that when there is no suppression of facts or mis-declaration, the extended period is not invokable and the demand has to be held to be barred by time. As we have already observed that the department upon whom lies the honors, has failed to adduce any such evidence which may entitle the department to invoke the extended period in terms of proviso to Section 73 (1) of Finance Act, 1994. We hold that the show cause notice raising demand for the year 2012 to 2014 cannot be issued in the year 2018. Such show cause notice is definitely barred by time. In view of the entire above discussion the order to be set aside on this ground as well. 11. In view of the entire above discussion, the order of Adjudicating Authority below is hereby set aside. Consequent thereto, the appeal stands allowed. [Order pronounced in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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