TaxTMI 
TaxTMI 
2012 (6) TMI 301
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....td. ('IRBPL') was engaged in the business of toll collection on behalf of M/s. National Highway Authority of India (NHAI). They entered into a contract with NHAI wherein they collected the toll for the specified national highway and remitted the same to M/s. NHAI and in respect of the services rendered they received a fixed remuneration from M/s. NHAI. This was for the period 01/07/2003 to 31/07/2006. For the period from 01/01/2006 to 31/07/2007, they also entered into a toll rights contract under which they paid a fixed monthly sum to M/s. NHAI on account of toll and collected the toll from the users of the roads and retained the entire amount with them. The department was of the view that the services rendered by M/s. IRBPL to M/s. NHAI w....
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....rvice tax under Section 76 and also a penalty of Rs. 8,000/- under Section77 for failure to file ST-3 returns for the period from July 2003 to March, 2007. The appellant is before us against the impugned order. 3. The learned counsel for the appellant submits that NHAI undertakes the activity of development, maintenance and management of National Highways which is a statutory function and the said activity cannot be considered as a 'business activity'. Since they have provided the services to NHAI not in relation to any business, their activity cannot be brought under the tax net under the category of 'Business Auxiliary Services'. The learned counsel further contends that during the period from 01/07/2003 to 09/09/2004, they are not lia....
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....anization and the functions of NHAI are not sovereign functions. Service tax in this case has been demanded from the appellant M/s. IRBPL for the services rendered by them to M/s. NHAI in respect of collection of toll charges either on a fixed remuneration contract or on the basis of toll rights collection contract. The learned Commissioner (AR) also relies on the judgment of this Tribunal in the case of Security Guards Board v. CCE [2011] 12 taxmann.com 195 (Mum. - CESTAT) wherein it was held that the activities undertaken by the Security Guards Board which is constituted under the State law will be liable to service tax under the category of 'Security Agency Services' and such functions cannot be considered as sovereign functions exempted....
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....to, it for the proper management thereof; (e) develop and provide consultancy and construction services in India and abroad and carry on research activities in relation to the development, maintenance and management of highways or any facilities thereat; (f) provide such facilities and amenities for the users of the highways vested in, or entrusted to, it as are, in the opinion of the Authority, necessary for the smooth flow of traffic on such highways; (g) form one or more companies under the Companies Act, 1956 (1 of 1956) to further the efficient discharge of the functions imposed on it by this Act; (h) engage, or entrust any of its functions to, any person on such terms and conditions as may be prescribed (i) advise the C....
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....e NHAI with the tolls collected by the Municipal Corporation of Delhi will be illogical for the reason that while the Municipal Corporation of Delhi is a democratically elected and constituted body under Article 243Q of the Constitution and is empowered to collect tolls, entry fees, etc. under Article 243X of the Constitution of India, M/s. NHAI is only a statutory body constituted under the NHAI Act, 1988 and has been assigned the functions of collection of tolls under Section 16 of the said NHAI Act. Merely because the terminology used in both the case is 'toll' it does not mean that the functions are the same or the nature of the levy is same. While one is sanctioned by the Constitution duly authorised by law, the other is authorised by ....
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....ary Services'. Prior to 10/09/2004, the said activity would prima facie be covered under clause 19(iv) of Section 65 and after 10/09/2004 the said service would be covered under clause 19(vii) of Section 65. 6. A similar issue came before the Hon'ble Apex Court in the case of P.C. Paulose, Sparkway Enterprises v. Commissioner of Central Excise & Customs [2011] 30 STT 241/9 taxmann.com 70. In that case the appellant was collecting entry fee at the airport on behalf of Airport Authority of India in terms of a licence agreement entered into between the appellant and the Airport Authority of India Ltd. The issue before the court was whether this activity would amount to a taxable service and the Apex Court held that the said activity would g....