2009 (10) TMI 667

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....tion established by and in terms of the Chapter II of the Karnataka Municipal Corporation Act, 1976. The appellant are collecting Building Licence fee, Scrutiny fee (Town Planning) and Completion Report fee in respect of various approvals given by them. Building Licence fee is for approval of ground plan which inter alia contains inspection of vacant site, scrutiny of ground plan details of intended use of building. Scrutiny fee is for scrutiny of title deed, scrutiny of building ground plan, lay out plan etc. Completion Report fee is for certification of building constructed and its adherence to the approved plan and certification of suitability of the building for the intended purpose as declared at the time of initial approval. 3. It ....

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.... of the Government. (3) appellant is not a technical inspection/certification agency. But is a sovereign body. The charges collected by the appellant is not a charge towards any service rendered by the corporation. 4. Personal hearing was held on 9-10-09 which was attended by Shri Ashok V. Deshpande, Adv. and K.S. Naveen Kumar, Advocate on behalf of the appellant who reiterated what has been stated in their written submissions. Findings : 5. I have gone through the facts of the case. The matter to be decided in this case is; (1) Whether the activity undertaken and the fees collected by the appellant and for which service tax has been demanded can be categorized as sovereign activity and eligible for exemption as per Circular ....

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....tion is given power to approve alteration of site construction of building etc. and also certification for building completion, and the corporation in turn has been allowed to collect certain fees from the applicants. These fees cannot be termed as consideration for rendering of any service. There is no quid pro quo in the case of the amounts collected by the appellant. In view of the above I find that the activity for which the SCN had been issued is a sovereign activity which is eligible for exemption as per Board Circular No. 89/7/2006-S.T., dated 18-12-06 and is not taxable. 8. This view has also been upheld in CESTAT, Bangalore Citation No. 2008 (9) S.T.R. 494 (Tri.-Bang.) in the case of M/s. CST, Bangalore v. Electrical Inspectorat....