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TMI Blog2025 (1) TMI 483X X X X Extracts X X X X X X X X Extracts X X X X ..... cessarily linked to the delayed or deferred payment of duty, such liability arises automatically by operation of law, as under section 75 of the Finance Act 1994, in the instant case. The same cannot hence be set aside once delayed payment of duty is demanded. Similarly, the imposition of penalty under section 76 of the Finance Act, 1994 is statutory in nature and becomes payable when there is a failure to pay service tax in the normal course. Conclusion - i) TASMAC is liable for service tax for the period 1st July 2012 to 28th March 2013. ii) Interest is applicable, but penalties under sections 77 and 78 are not, due to the interpretative nature of the issue. Appeal disposed off. - SHRI P. DINESHA, MEMBER (JUDICIAL) AND SHRI M. AJIT KUMAR, MEMBER (TECHNICAL) Shri G. Neelamegam, Assistant General Manager for the Appellant Smt. Anandalakshmi Ganeshram, Authorized Representative for the Respondent ORDER These appeals arise out of the above eight Orders in Original passed by the Commissioner of Central Excise, Trichy. The issue involved in all these appeals being common, they were heard together and are disposed by this common order. 2. The common facts involved in these appeals are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration for the support services provided by them as above and had not paid service tax on the amount received by them as License Fee from the bar contractors and hence the service tax payable by them is liable to be recovered under sec. 73(1) of Finance Act, 1994 along with appropriate interest under sec. 75 ibid. Accordingly, Show Cause Notice were issued seeking to demand service tax on the amount collected as License Fee under the proviso to sec. 73(1) of the Act. The demand notice issued to TASMAC, covering the period and the service tax demand are as under:- S. No. District Name Period of Dispute Amount of Service Tax 1. Karur April 2013 to Sept. 2014 Rs.1,20,20,205/- 2. Nagapattinam April 2013 Sept. 2014 Rs.50,05,876/- 3. Perambalur April 2013 March 2015 Rs.1,36,05,099/- 4. Pudukottai April 2013 March 2014 Rs.1,40,22,354/- 5. Thanjavur April 2014 March 2015 Rs.1,56,43,413/- 6. Thanjavur April 2013 March 2014 Rs.1,55,96,697/- 7. Tiruvarur April 2013 Sept. 2014 Rs.1,15,45,330/- 8. Trichy April 2013 March 2015 Rs.4,37,45,441/- Total Amount Demanded Rs.13,11,84,415/- As seen from the Table above, the period of dispute is after the introduction of the Negative List with effect fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Hon'ble High Court in Hotel Bar Association of Tamil Nadu (supra) cited by the appellant. She hence prayed that the appeals may be rejected. 4. We have heard the parries and perused the appeals. We find that as stated by revenue an identical issue was considered by a coordinate bench of this Tribunal in the appellants own case for the period October 2008 to March 2013, vide order dated 03/04/2018, referred to in the para above, which has been upheld by the Hon ble Madras High Court judgment dated 24/10/2018, [2019 (6) TMI 1328 - MADRAS HIGH COURT] and is hence binding on us. 5. The relevant portion of the Tribunal s order dated 03/04/2018 is reproduced below:- 6.8 However, the position changes after the introduction of the Negative List regime w.e.f. 1.7.2012, from which date the activities which were liable to service tax under Finance Act, 1994 were given a much wider and broad banded scope in Section 65B (44) as under : (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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecting empty bottles etc. is only a decision of the Board and cannot be brought on par with sovereign function exercised by the State. In fact, even from the copies of the audited balance sheets of TASMAC submitted along with the appeal, we find that the balance sheet has been prepared and audited only in terms of Section 227 (4A) of the Companies Act, 1956 and in terms with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956. Even the Supplementary Audit conducted by the Comptroller and Auditor General of India of TASMAC has been carried out in terms of Section 619 (3) (b) of the Companies Act, 1956 only. The activities of TASMAC for most of the period under dispute cannot therefore be said to be activities assigned and performed by sovereign / public authority under the authority of law. 6.12 We find that this aspect has been also clarified by the CBEC in Master Circular No.96/7/2007-ST dt. 23.08.2007, which is further reiterated by Circular No.89/7/2006 dt. 18.12.2006 where it is inter alia clarified as follows : However, if a sovereign / public authority provides a service, which is not in the nature of statutory activity and the same is undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity are normally created by the Parliament or a Stage Legislature in exercise of the powers conferred under article 53 (3) (b) and article 154 (2) (b) of the Constitution respectively. It is a settled position of law Government (Agarwal v. Hindustan Steel AIR 1970 Supreme Court 1150) that the manpower of such statutory authorities or bodies do not become officers subordinate to the President under article 53 (10 of the Constitution and similarly to the Governor under article 154 (1). Such a statutory body, corporation or an authority as a juristic entity is separate from the state and cannot be regarded as Central or State government and also do not all in the definition of local authority. Thus regulatory bodies and other autonomous entitled which attain their entity under an act would not comprise either government or local authority. 6.16 At the same time, we take note that in exercise of the powers conferred by sections 17-C, 17-D, 21 and 22-D read with Section 54 of Tamil Nadu Prohibition Act, 1937, in Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003 was amended by insertion of Rule 9A w.e.f. 29.03.2013 as follows : 9A. Grant of privilege to run the bar: - The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g so, judicial discipline requires us to follow the judgment of the Coordinate Bench for an earlier period, especially when the issues are the same and have not been distinguished on facts by the appellant. 6. Two other legal issue raised in appeal are the levying of interest under section 75 and imposition of penalty under section 76 (as it stood prior to amendment on 14/05/2015), 77 78 of the Finance Act 1994. It is no longer res integra that interest is necessarily linked to the delayed or deferred payment of duty, such liability arises automatically by operation of law, as under section 75 of the Finance Act 1994, in the instant case. [See: Hon ble Supreme Court's judgment in Commissioner of Central Excise, Pune Vs M/s SKF India - 2009-TIOL-82-SC-CX]. The same cannot hence be set aside once delayed payment of duty is demanded. Similarly, the imposition of penalty under section 76 of the Finance Act, 1994 is statutory in nature and becomes payable when there is a failure to pay service tax in the normal course. The Hon ble supreme Court in its judgment in State Of U.P. Others Vs Sukhpal Singh Bal, [Appeal (Civil) 8871 of 2003 / AIR 2005 SUPREME COURT 3324 / 2005 (7) SCC 615] ..... X X X X Extracts X X X X X X X X Extracts X X X X
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