TaxTMI 
TaxTMI 
2011 (5) TMI 192
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....National Highways Authority of India (NHAI for short) to improve and upgrade a section (52.8 KM to 163.6 KM) of National Highway No. 5 (NH-5) and a section (217 KM to 252 KM) of National Highway No.9 (NH-9) in Andhra Pradesh, the former referred to as "Tada-Nellore section of NH-5" and the latter referred to as "Nandigama-Ibrahimpatnam section of NH-9". The work included construction, strengthening and widening of the two-lane Highways into four-lane Highways and the operation and maintenance and toll collection of the above sections through a 'Concession' on "Build, Operate and Transfer" (BOT) basis. Accordingly, NHAI entered into Agreement, dated 19-12-2000 with a Malaysian company viz. CIDBI Inventures SDN BHD ("CIDBI" for short). This agreement was concluded after NHAI invited proposal from CIDBI for design, engineering, financing, procurement and construction, completion, operation, maintenance and toll collection of the aforesaid "highways on BOT basis and after the detailed project proposal submitted by CIDBI was accepted by NHAI. The scope of the project was laid down under the agreement as follows: "Scope of Project" shall include the strengthening and widening to 4-lan....
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....greement to a "Special Purpose Vehicle" (SPV) to be constituted by CIDBI either solely or jointly with other parties for the purpose of implementing the project and the concession. The clause reads as follows: "Neither party may assign, transfer or otherwise dispose of all or any part of its rights and obligations under this Memorandum of Agreement to any person without the prior written consent of the other party, consent of which shall not be unreasonably withheld provided that CIDBI shall be entitled to transfer all rights, benefits, interest, duties and obligations of CIDBI under this Memorandum of Agreement to a Special Purpose Vehicle (SPV) to be constituted by CIDBI, either solely or jointly with other parties for the purpose of implementing the Project and the Concession, and in such event NHAI shall enter into the Concession Agreement with the Special Purpose Vehicle (SPV). (underlining added) 4. On 27-3-2001, the Concession Agreement was executed between NHAI and CIDBI, whereunder NHAI granted to CIDBI (Concessionaire) the concession for a period of 30 years, including the exclusive right, licence and authority to implement the project and the concession in respect ....
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....ereby releases each other from their respective rights, duties and obligations under the Concession Agreement. 2.4 This Assignment Agreement shall be annexed to the Concession Agreement, dated 27th March, 2001 and shall form an integral part of the Concession Agreement." (underlinings added). 5. By a Notification, dated 28-4-2004, the Central Government (Ministry of Road Transport and Highways) prescribed the rates at which fees should be levied and collected from vehicles for the use of the Project Highways and also authorized CIDBI (Concessionaire) to collect and retain such fees from the date of commercial operation till the date of termination of the Concession Agreement. As the assessee had entered into the shoes of CIDBI through the Assignment Agreement, they collected such fees from the users of the Project Highways during the period of dispute. 6. By a show-cause notice, dated 20-11-2007, the department demanded from STPL service tax of over Rs. 10.48 crores with education cess on the toll charges collected by them at Venkatachalam Toll Plaza, Budanam Toll Plaza and Sullurpet Toll Plaza on NH-5 from 21-5-2004 to 31-12-2006. By another show-cause notice, dated 16-4-....
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....cisely stated in one of the impugned orders as follows: "The show-cause notices levelled allegation on the notices that M/s. Swarna Tollway (P.) Ltd. is acting as an agent for M/s. CIDBI by collecting toll on the road users on behalf of CIDBI and that consequently, their role of toll collection as an agent squarely falls under the category of Business Auxiliary services. Therefore, M/s. Swarna Tollway (P.) Ltd. are liable to pay service tax on the toll charges collected by them." Vide Order-in-Original No. 7/2008-ST, dated 17-10-2008 10. The assessee's contention vis-a-vis the above allegation was also stated briefly in the same order of the Commissioner, as follows: "But M/s. Swarna Tollway (P.) Ltd. contended that they were not an agent acting on behalf of M/s. CIDBI while collecting toll charges and that they were collecting the toll charges and retained them being the Concessionaire. Consequently, they were not liable to pay service tax as they were not an agent and their toll collection did not amount to rendering Business Auxiliary Services." 11. The learned Commissioner's findings on the above dispute between the Revenue and the assessee can be had from paragraph....
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....ry of Road and Transport and that too when the Ministry's Notification came after the Assignment Agreement entered into between the NHAI, CIDBI and STPL. Therefore, it is crystal clear that CIDBI alone is the concessionaire and the STPL is not a concessionaire but an agent of CIDBI." 12. Similar findings were recorded in the other impugned orders also. In the nature of the present case, we need not advert to the findings recorded by the Commissioner on ancillary issues. 13. The issue vigorously agitated before us is whether the toll charges were collected by STPL qua concessionaire, as claimed by them, or, in the capacity of an agent for CIDBI, as claimed by the Revenue. The learned counsel for the assessee extensively referred to the provisions of the 'Concession Agreement' and the 'Assignment Agreement' and submitted that STPL was functioning as 'Concessionaire' and not as any agent of CIDBI. In support of this contention, the learned counsel relied on a few documents available on record. In our view, two of these documents are crucial and the same are (i) Notification No. S.O.1212(E), dated 13th May 2009 issued by the Central Government under section 8A of the National Hig....