Toll collection services on behalf of a statutory authority can prima facie fall under Business Auxiliary Service, limiting stay relief.

Services rendered by a contractor for collection of toll charges on behalf of the National Highways Authority of India were treated as prima facie falling within Business Auxiliary Service because the authority functions on business principles and the toll is a fee for services, not a sovereign tax or duty. The analysis distinguished highway development and fee collection from sovereign functions and noted consistency with similar cases involving statutory airport authorities. On that basis, complete waiver of pre-deposit was declined, and the appellant was required to deposit Rs. 45 lakhs, with the balance demand, interest and penalties stayed on compliance.

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Issues: Whether, for the purpose of waiver of pre-deposit and stay of recovery, the toll-collection services rendered by the appellant on behalf of the National Highways Authority of India were prima facie classifiable as Business Auxiliary Service and whether the appellant had made out a case for complete waiver.

Analysis: The National Highways Authority of India is a statutory authority constituted under the National Highways Authority of India Act, 1988 and is required to function on business principles. Its activity of developing, maintaining and managing national highways, including collection of fees, was distinguished from sovereign functions of the State. The toll collected by the authority was treated as a fee for services rather than a tax or duty. On that basis, services rendered by the appellant in collecting toll charges on behalf of the authority were held prima facie liable to fall within Business Auxiliary Service. The order also noted that a similar view had been taken in comparable matters involving collection of charges on behalf of statutory airport authorities.

Conclusion: The appellant was not entitled to complete waiver of the dues adjudged and was directed to make a pre-deposit of Rs. 45 lakhs, with balance demand, interest and penalties stayed on compliance.

Ratio Decidendi: Services rendered for collection of statutory fees by a contractor on behalf of a statutory authority functioning on business principles can prima facie fall within Business Auxiliary Service and do not become exempt merely because the activity is connected with a public function.

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