2014 (12) TMI 999 - AT - Service Tax

Waiver of pre-deposit granted for wind farm transfer fee tax appeal

The Tribunal allowed the waiver of pre-deposit and disposed of the appeal after finding that the appellant, a nodal agency for the Government of Gujarat, ... Restoration of appeal - Non complaince of pre deposit order - Technical Inspection and Certification Service - Held that:- Appellant herein is a nodal agency for the Government of Gujarat as regards Gujarat Energy Development, more specifically for wind-mills. The appellant herein charges some amount as transfer fee for transferring developed wind farm to the clients. Revenue’s contention is that, such transfer fee is liable to be taxed under the head ‘Technical Inspection and Certification Service’. At this juncture, we find that the services rendered by the appellant and charging transfer fee, prima facie, may not get covered under ‘Technical Inspection and Certification Service’, as the appellant herein has, in our view, rendering a statutory function. This is our prima facie view and we have not considered the entire issue in detail. Accordingly, since the first appellate authority has dismissed the appeal for non-compliance, we are unable to go into the merits of the case. In order to meet the ends of justice, it would be appropriate that first appellate authority is given a chance to decide the issue on merits. - Matter remanded back - Appeal restored. Issues:1. Dismissal of appeal for non-compliance of pre-deposit.2. Tax liability on transfer fee charged by the appellant.3. Prima facie view on the nature of services rendered by the appellant.4. Direction to first appellate authority for restoration of appeal.Analysis:1. The Tribunal found that the appeal could be disposed of as the first appellate authority had dismissed it due to non-compliance with the pre-deposit order. The Tribunal decided to take up the appeal for disposal after allowing the waiver of pre-deposit of the amounts involved.2. The appellant, a nodal agency for the Government of Gujarat in Gujarat Energy Development, charged a transfer fee for transferring developed wind farms to clients. The Revenue contended that this fee should be taxed under 'Technical Inspection and Certification Service.' However, the Tribunal, on prima facie examination, opined that the services rendered by the appellant and the transfer fee charged may not fall under the said category as the appellant was performing a statutory function.3. Considering the prima facie view that the transfer fee could be a statutory fee, the Tribunal directed the first appellate authority to restore the appeal to its original number and decide the case on merits without requiring further deposit. The Tribunal clarified that it had not addressed the merits of the case and left all issues open for the first appellate authority to decide while following the principles of natural justice.4. The Tribunal disposed of the appeal by way of remand, emphasizing the need for the first appellate authority to reconsider the case on its merits without focusing solely on non-compliance issues. The decision aimed to ensure that justice was served by allowing a thorough examination of the case by the appropriate authority.