Statutory forest fees are not taxable service consideration when collected for sovereign conservation and entry regulation functions.

Charges collected by the forest department for permits, park entry and related facilitation were examined for service tax under tour operator and accommodation heads, but the collections were treated as statutory fees linked to conservation and regulation of entry into forest areas. Because the amounts were credited to the State treasury and arose from mandatory statutory functions, they were held not to be consideration for a taxable service. The tribunal followed an earlier identical ruling and held that the service tax demands, along with interest and penalty confirmations, could not survive on the same reasoning.

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Issues: Whether charges collected by the forest department from tourists for permits, park entry, and related facilitation were exigible to service tax as tour operator services or accommodation services, or whether they were statutory fees collected in discharge of sovereign functions and therefore of service tax levy.

Analysis: The activity was examined in the light of the statutory framework governing forest and wildlife protection, the definition of tour operator service, and the principle that amounts collected for mandatory statutory functions are not consideration for a taxable service. The collection was found to be integrally connected with conservation and regulation of entry into the forest area, and the amounts were credited to the State treasury. Following the earlier decision on an identical issue, the tribunal held that such receipts were fees collected under statutory authority for performance of sovereign functions and not consideration for organising tours. The demand could not survive on the same reasoning for the other heads raised in the show cause notices.

Conclusion: The service tax demands were not sustainable and the impugned orders were set aside.

Final Conclusion: The appeals succeeded and the tax, interest, and penalty confirmations were vacated because the disputed receipts were treated as statutory collections made in discharge of sovereign functions rather than taxable service consideration.

Ratio Decidendi: Amounts collected by a statutory public authority for carrying out mandatory sovereign or statutory functions do not constitute consideration for service tax merely because the activity involves permits, regulation, or ancillary facilitation for the public.

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