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The appellant made payments of Net Present Value (NPV) to the Compensatory Afforestation Fund (CAMPA Fund) as a constitutional mandate under Article 48 of the Constitution of India, for the usage of forest land for non-forest purposes. The adjudicating authority considered the payment of NPV as consideration for a 'Declared Service' u/s 66E(e) of the Finance Act, 1944. However, the Tribunal held that the clearance granted for usage of forest land cannot be considered a 'Declared Service', and the NPV payment cannot be considered as consideration for such service. Therefore, the demand of service tax along with interest is not sustainable. Additionally, there was no suppression of facts by the appellant, and hence, the extended period cannot be invoked, and penalty u/s 78 of the Finance Act, 1994 is not imposable. Consequently, the impugned order was set aside, and the appeal was allowed.
The appellant made payments of Net Present Value (NPV) to the Compensatory Afforestation Fund (CAMPA Fund) as a constitutional mandate under Article 48 of the Constitution of India, for the usage of forest land for non-forest purposes. The adjudicating authority considered the payment of NPV as consideration for a 'Declared Service' u/s 66E(e) of the Finance Act, 1944. However, the Tribunal held that the clearance granted for usage of forest land cannot be considered a 'Declared Service', and the NPV payment cannot be considered as consideration for such service. Therefore, the demand of service tax along with interest is not sustainable. Additionally, there was no suppression of facts by the appellant, and hence, the extended period cannot be invoked, and penalty u/s 78 of the Finance Act, 1994 is not imposable. Consequently, the impugned order was set aside, and the appeal was allowed.
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