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TMI Blog2023 (2) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... reased vehicular traffic or any other reason affects the revenue steam of the appellant. A Commission Agent is akin to a channel partner in delivery of goods/service, wherein the Principal bears all the risks. In the instant case, the tax liability does not arise by way of being Commission Agent as per section 65(19) of the Finance Act, 1994 for the period prior to introduction of negative list regime. This issue under consideration is squarely covered by the order of this Tribunal in the case of SOUVENIR DEVELOPERS INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, CUSTOMS SERVICE TAX I [ 2022 (5) TMI 868 - CESTAT MUMBAI] where it was held that Oversight by agencies of the state is intended to assure proper maintenance of the asset and fixation of rates is retained by the government to prevent exploitative exaction both of which are mandated by public interest and not as a facet of principal-agent equation. Thus, tax liability does not arise by way of being commission agent in section 65(19) of Finance Act, 1994 for the period prior to introduction of negative list regime. Appeal allowed. - MR. DILIP GUPTA, PRESIDENT AND MS. HEMAMBIKA R PRIYA, MEMBER (TECHN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccess to the road or bridge on payment of toll charges. Therefore, service tax was leviable. 4. We have heard Ms Neha Choudhary, learned counsel for the appellant and Dr. Radhe Tallo, learned authorised representative appearing for the Department. 5. The learned counsel for the appellant placed reliance on contract between the appellant and NHAI and submitted that the appellant is an independent contractor, having their own separate and independent establishment and was engaged in the business of providing various services on contract basis, which is as follows: B) WHEREAS the Contractor is authorized by its Memorandum of Association Bye-laws to carry on the business of providing various services on contract basis through its employees employed regularly or otherwise. (C) AND WHEREAS the Contractor has its own separate and independent establishment which (a) has been registered under the provisions of the Shops Establishments Act, 1954 of the (mention the name of concerned State); (b) is licensed under the provisions of the Contract Labour (Regulations Abolition) Act, 1970 and has obtained license No. dt. AND WHEREAS the Contractor undertakes to get its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Bans Sands TTC vs CCE, New Delhi [2016 (9) TMI 374 CESTAT, New Delhi] As regards the demand for the period 01.07.2012 to 31.03.2013, she stated that the demand was not sustainable as the service is covered under section 66 D(h) of the Act. 7. The learned Authorised Representative appearing for the department submits that in the contract between the appellant and NHAI, the appellant/service provider has agreed to undertake the aforesaid activity and both the parties have signed the contract to abide by the terms conditions for carrying out the activities of collection of toll fees from the users of the road. Thus, this activity of collection of toll fees for NHAI is covered by the the phrase on behalf of . He argued that without consent of NHAI, nobody can collect the toll fees from the user of the road. Hence, the appellant was acting as a representative of NHAI before the users of the road, and taking fees on behalf of NHAI. Therefore, the appellant was acting as contractor for NHAI only and collecting the toll charges from the users of the road and submitting the records to the authority. It is also a fact that by way of the contract, the NHAI has given the rig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, the services provided by the service provider are not covered under the negative list and was liable to service tax. This contention also gets support from Circular No. 152/3/2012-ST dated 22.02.2012 wherein it was clarified that if Special Purpose Vehicle engages an independent entity to collect toll from users on its behalf and a part of toll collection is retained by that independent entity as commission or is compensated in any other manner, service tax liability arises on such commission or charges, under the Business Auxiliary Service under Section 65(105) (zzb) read with Section 65(19) of the Finance Act, 1994 upto 30.06.2012. Therefore, the services as rendered by the service provider are liable to service tax under the category of Business Auxiliary Service under Section 65(105) (zzb) read with Section 65(19) of the Finance Act, 1994 upto 30.06.2012. With effect from 01.07.2012, 'as per Section 65B(44) of Finance Act 1994, service includes any activity carried out by a person for another for consideration. These services are not covered under any exemption granted vide Notification No. 25/2012 or any other notification. 9. We have heard the arguments carefull ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... encies of the State was for undertaking collection of toll or user fee , as the case may be, while also ensuring maintenance of roads in the condition in which these were handed over. These may, at best, be perceived as rendering service to these agencies of the State, and with user of the road as nothing but statistical probability when their bid was made and accepted, having no other intended recipient. Even this restricted depiction is founded solely on the fitment of the statutory definitions of the taxable service on to the commercial definitions employed in the contract without delving into the scheme. It is moot if, in the determination of tax liability, the commercial expressions deployed in a contract should be so construed, as the adjudicating authority has, without scrutinizing the context of the entirety of the contract for fitment within the charging provision of the statute. 11. Toll is a constitutionally authorized levy assigned to Governments of Constituent States of the Union and, unarguably, to be collected under the authority of the State Government. It is not the case of the service tax officers that the mechanism erected for such collection compromise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gency. Reliance was placed on Circular [No. 152/3/2012-S.T., dated 22nd February, 2012] of Central Board of Excise Customs (CBE C) distinguished the collection of toll by a Special Purpose Vehicle (SPV) established for a project and collection of toll by independent entity engaged for collection on commission, or other basis, for excluding the appellant from immunity to tax. 14. The narration in the said circular suggesting the dichotomous treatment does not even begin to appreciate the complexity of infrastructural creation. It was probably not intended to clarify anything beyond a model for collection simpliciter and the construing of such bland arrangement as intendment of tax liability in all models of road infrastructure partnership designs appears to be overreach on the part of the adjudicating authority. The circular, not having considered the degrees of private participation in infrastructure projects, is not a reliable guide to tax liability except in instances that was so intended therein. 15. We fail to perceive the authority under which the impugned order has concluded that, with effect from 1st July, 2012, the activity enumerated in the negative list in S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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