Tribunal rules toll collection not a service, no penalty imposed, appeal allowed.

The Tribunal ruled in favor of the appellant, determining that the collection of toll did not amount to providing Business Auxiliary Service. The activity fell under the negative list of services, and the extended period of limitation was not applicable. The demand computation by the department was deemed incorrect, and no penalty was imposed as the appellant acted in good faith. The Tribunal set aside the Commissioner's findings, allowing the appeal.

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Issues Involved:
1. Whether the collection of toll by the appellant amounts to providing Business Auxiliary Service.
2. Applicability of the negative list of services to the activity of collecting toll.
3. Interpretation of Circular No.152/3/2012-ST dated 22.02.2012.
4. Invocation of the extended period of limitation.
5. Correctness of the demand computation by the department.
6. Imposition of penalty.

Issue-wise Detailed Analysis:

1. Whether the collection of toll by the appellant amounts to providing Business Auxiliary Service:
The primary issue was whether the appellant's activity of collecting toll under a contract with NHAI constituted providing Business Auxiliary Service. The department argued that the appellant was a service provider for NHAI, collecting toll on behalf of NHAI, thus falling under Business Auxiliary Service as defined under Section 65(19) of the Finance Act, 1994. However, the Tribunal found that the contract between NHAI and the appellant was on a principal-to-principal basis, not as an agent. The appellant was responsible for all risks and rewards and was not merely collecting toll on behalf of NHAI. Therefore, the appellant was not providing Business Auxiliary Service.

2. Applicability of the negative list of services to the activity of collecting toll:
The appellant contended that the activity of collecting toll was covered under the negative list of services. The Tribunal agreed, stating that the user fee collection rights were transferred by NHAI to the appellant for a fixed weekly remittance, irrespective of the amount collected. This arrangement did not constitute a service provided to NHAI. The Tribunal referenced Section 66B of the Finance Act, which excludes certain activities from the definition of service, and concluded that the appellant's activity fell under the negative list, specifically clause (h) of Section 66D.

3. Interpretation of Circular No.152/3/2012-ST dated 22.02.2012:
The department relied on Circular No.152/3/2012-ST to argue that the appellant was providing Business Auxiliary Service. However, the Tribunal found that the circular was misinterpreted. The circular applies when toll collection is made on behalf of NHAI and a part of the toll is retained by the collection agency. In this case, the appellant paid a fixed amount to NHAI and retained the toll collected, indicating a principal-to-principal relationship. Thus, the circular was not applicable.

4. Invocation of the extended period of limitation:
The Tribunal held that the extended period of limitation could not be invoked as the appellant did not suppress any facts with intent to evade duty. The appellant had a service tax registration, and all transactions were recorded in the books of accounts, disclosed to the department during scrutiny. The issue involved interpretation of law, and there was no deliberate attempt to evade tax. Therefore, the extended period of limitation was not applicable.

5. Correctness of the demand computation by the department:
The appellant argued that the demand computed by the department was incorrect as the amount was inclusive of tax. The Tribunal found that the appellant was not liable to pay service tax on the toll collected, as the activity was covered under the negative list of services. Therefore, the demand computation by the department was incorrect.

6. Imposition of penalty:
Given that the appellant was not liable for service tax and the extended period of limitation was not applicable, the Tribunal held that no penalty could be imposed. The appellant was in bona fide belief about the exemption on the services provided, and there was no deliberate attempt to evade tax.

Conclusion:
The Tribunal set aside the findings of the Commissioner (Appeals), holding that the appellant was not providing Business Auxiliary Service, the activity of collecting toll was covered under the negative list of services, and the extended period of limitation was not applicable. The order under challenge was set aside, and the appeal was allowed.

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