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TMI Blog2023 (6) TMI 1001X X X X Extracts X X X X X X X X Extracts X X X X ..... ow of consideration to the appellant company and to the Indian Railway even as a separate unit so as to subject it to an independent entity under the category of service. Moreover, Indian Railways is not a separate unit that of the appellant company since it is deemed owner and a part of it having larger share during the relevant period for which show cause notice was issued. Therefore, the demand of service tax on this score on the appellant company is also not sustainable. Section 65(105)(zzzq) of Finance Act defined taxable service to mean any service provided or to be provided to any person, by any other person, in relation to support services of Business or Commerce and our finding as referred above would go to say that both the appellant and Indian Railways are not separate entities, it is thus held that the Appellant s case is also covered by Board s Circular No.109/3/2009-S.T., dated 23.2.2009. The confirmation of demand by the Commissioner is unsustainable, for which the order passed by the Commissioner is required to be set aside - appeal allowed. - Service Tax Appeal No. 87709 of 2019 - FINAL ORDER NO. 85984 / 2023 - Dated:- 22-6-2023 - HON BLE DR. SUVENDU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty under Sections 76, 77 as well as equal penalty under Section 78 of the said Finance Act, 1994 for the extended period. The appellant, having registered office at Mumbai, had unsuccessfully contested the same and thereafter approached this Tribunal for necessary relief against the confirmation of demand etc. by the Commissioner. 3. During course of hearing of the appeal, it was noticed that an application was filed by the learned Counsel for the Appellant for out of turn hearing of the appeal on the ground that the issue has been settled by this Tribunal in view of consistent orders passed by this Tribunal including that of the judgements in Mudra Ports Special Economic Zone Ltd. Vs. CCE, Rajot reported in 2011-TIOL-1321- CESTAT-AHM and Bharuch Dahej Railway Co. Ltd. reported in 2019- TIOL-1175-CESTAT-DEL for which the same application was allowed vide order dated 27.02.2020 accordingly appellant was heard on 11.5.2023. Learned DR for the respondent department expressed reservation of the respondent department for acceptance of the ratio of above these two judgments, for which maintainability of the appeal on judicial precedent alone is taken up at the first instance to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, decision delivered acts as Res Judicata if parties litigating in the subsequent proceedings are same. 7. However, in the instant appeal, acceptance of precedent value of order passed by this Tribunal on the issue is being questioned! In this connection, we are persuaded by the judgement of Hon ble Allahabad High Court in Natraj Chhabigrih, Sigra vs State Of U.P. and Another reported in AIR 1996 1996 All 375. Para 17 of the judgement reads as under: 17. The principle of binding judicial precedent is well sealed. Not only decision of higher Courts are binding on the Courts lower in hierarchy, even in the same Court it binds Bench of lower number of Judges even to equal number of Judges of coordinate jurisdiction. Thus judgment of a Division Bench is binding on subsequently consumed Division Bench of co-ordinate jurisdiction (equal number of Judges). It cannot decide contrary but has an option with judicial sanction to refer it to a larger Bench . We, therefore, accept he precedent value of both the decisions. 8. At this juncture, on the issue of taxability though not sufficient argument is led by both parties, we consider it proper to place on record our opinion an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions contained in Article 274 and 289 of the Constitution of India. This being the constitutional mandate applicability of service tax in general, on the income of State in respect of trade or business, is not permissible and on this score alone duty demand against the appellant, constituted by four States and Indian Railway, would not survive. 11. Now coming to the legality of the order that is being assailed, we consider it proper to take up the points of arguments led by both the sides on the issues and give our findings accordingly. 12. Learned Counsel for the appellant Mr. Chirag Shetty submitted that with reference to the Budget speech of Hon ble Railway Minister made on 14.3.1990, making proposal for formation of a Railway company in terms of Companies Act 1956 for the purpose of construction and operation of railway lines that had received the Cabinet approval Government of India through Hon ble President of India and Governments of Maharashtra, Goa, Karnataka and Kerala through their respective Hon ble Governors entered into a joint venture company agreement on 19.6.1990 to be operated under the control of Ministry of Railway. In the said agreement, it has been clear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even both Indian Railway and KRCL have two training institutes and audit staff of different status. Further, management of the zonal units are headed by General Managers while the Appellant company is headed by the Chairman/Directors and therefore, merely being a Public Sector Undertaking under the Ministry of Railway of the Government of India would not make it entitled for exemption available to Government of India. Since PSU, namely, Government companies are subjected to taxing Statute. 14. We have heard submissions on the standing of the Appellant company and gone through written submissions as well as relied upon case laws in order to give our finding on the issue as to if both Indian Railway and the Appellant are two separate units functioning under the main unit namely Indian Railway s administrative control. Going by the agreement executed among government of India and four federal units, the company that is formed would be deemed to be Railway Company under the provisions of Indian Railway Act, 1890, as amended from time to time. Moreover, validity of agreement was for 15 years or for further period to be extended for the purpose of complete discharge of the liabilit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom payment of service tax upto 1.7.2012 and thereafter, service tax has been paid against purchase of tickets, collection of freight charges by the respective passengers at the stations where such purchases were made for which demand of service tax from the appellant company for permitting Indian Railways to use the infrastructure to provide transportation of passengers and transportation of goods would amount to double taxation, apart from the fact that in the show cause notice the same is categorised as business support service for allowing Indian Railways to use infrastructure of the appellant company. In this connection, he had also referred to the definition of support service on Business and Commerce explained under Section 65 (104c) of the Finance Act, 1994 and more importantly to its explanation that categorised services that could be considered as infrastructural support service , which are distinctly different from the nature of the service allegedly provided by the appellant. He further added that Board s Circular No. 109/3/2009- S.T., dated 23.2.2009 stipulates that when contract/agreement is carried on principle to principle basis, they cannot be considered as servic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt could be apparently equated with services described above for which the appellant is required to declare itself as service provider of support service of Business and Commerce and specifically extending infrastructural support service . We are therefore, of the considered view that Section 65(105)(zzzq) of Finance Act defined taxable service to mean any service provided or to be provided to any person, by any other person, in relation to support services of Business or Commerce and our finding as referred above would go to say that both the appellant and Indian Railways are not separate entities, we have no hesitation to hold that the Appellant s case is also covered by Board s Circular No.109/3/2009-S.T., dated 23.2.2009. 20. This being facts on record and law on the subject that appears to be completely different from the demand raised in the show cause notice and confirmed by the Commissioner, it would be out of context to discuss about the extended period, computed since 2009 apart from the fact that Indian Railways is given exemption from payment of service tax for the prior period up to 1.10.2012. Therefore, we conclude this discussion by holding that confirmation of d ..... 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