Statutory fees for mandatory functions are not service tax liable when collected under a pre-notified regulatory framework.

Fees collected for carrying out statutory functions under the Energy Conservation Act and the relevant regulations were treated as part of mandatory public duties, not as a voluntary commercial service. The Tribunal noted that the charges were pre-notified and fixed by authority, and that the same issue had already been decided in the respondent's favour for an earlier period. On that basis, fees received for statutory performance were held not liable to service tax under the category of technical inspection and certification service, and the challenge to dropping the proceedings failed.

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Issues: Whether fees collected by the respondent for carrying out functions mandated under the Energy Conservation Act and the regulations framed thereunder were liable to service tax under the category of technical inspection and certification service.

Analysis: The Tribunal noted that the same issue had already been decided in the respondent's favour for an earlier period. It accepted that the fees were collected in discharge of statutory obligations under the governing enactment and regulations, that the amounts were pre-notified and fixed by authority, and that the activity was not a voluntary commercial service. Fees collected for statutory performance, in these circumstances, could not be subjected to service tax.

Conclusion: The fees collected for statutory performance were not exigible to service tax, and the challenge to the dropping of proceedings failed.

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