Statutory bus stand fee is not Business Support Service, and time-barred tax demand with penalties cannot survive.

Fee collected by a statutory undertaking for maintenance of bus stands was held not taxable as Business Support Service, because it was a statutory levy linked to discharge of a public function and did not amount to promoting or supporting bus operators' business. The demand on Adda Fee was therefore set aside. The show cause notice was also issued beyond the relevant period, and no valid basis for invoking the extended limitation period was established. The demand to that extent was time-barred, and the consequential penalties could not survive and were set aside.

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Issues: (i) whether the amount collected as Adda Fee bus stand fee from bus operators was chargeable to service tax as Business Support Service; and (ii) whether the demand and penalties were barred by limitation.

Issue (i): whether the amount collected as Adda Fee bus stand fee from bus operators was chargeable to service tax as Business Support Service.

Analysis: The bus stands were treated as facilities maintained in discharge of a statutory function, and the fee collected from bus operators was found to be a statutory levy for maintenance of the bus stands. Such collection did not amount to promotion or support of the business of bus operators. The activity, being in the nature of a sovereign or statutory obligation, could not be brought within the scope of Business Support Service.

Conclusion: The demand on Adda Fee was unsustainable and was set aside in favour of the assessee.

Issue (ii): whether the demand and penalties were barred by limitation.

Analysis: The show cause notice was issued beyond the relevant period, and the assessee was a statutory undertaking carrying out public functions. In these circumstances, the invocation of extended period was not justified, and the penalties founded on the disputed demand could not survive.

Conclusion: The demand was held to be time-barred to the extent challenged, and the penalties were unsustainable.

Final Conclusion: The appeal succeeded, the impugned demand could not be sustained on the principal disputed count, and the consequential penalties were also set aside.

Ratio Decidendi: A fee collected by a statutory or public authority in discharge of a statutory function for maintenance of public facilities is not taxable as Business Support Service, and where the demand is raised beyond limitation without a sustainable basis for extended period, the consequential penalties cannot stand.

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