TaxTMI 
TaxTMI 
2016 (6) TMI 367
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....wer Ltd., Raipur, one of the recipients of service provided by the appellant, it came to notice that the appellant had charged and collected consideration for the said service. It had charged the amount towards the Maintenance Charges and Street Light Charges from many such recipients. The adjudicating authority held the said amount liable to service tax under Repair and Maintenance Service and passed the order as above. 3. The appellant has contended that:- (i) It performed statutory functions on behalf of the State Govt. and so is not liable to service tax. (ii) In the absence of any agreement, the maintenance and street light charges collected by it on behalf of Chhattisgarh Govt. cannot be subjected to service tax. (iii) It was only a facilitator on behalf of the State Govt. (iv) The charges collected were accounted separately under the head State Govt. Account. (v) There is no wilful mis-statement or suppression of facts and therefore extended period and mandatory penalty are not invocable. 4. Ld. Departmental Representative, on the other hand, contended that (i) there is no exemption from service tax merely because the service is rendered as statutory....
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....nue) Central Board of Excise & Customs, New Delhi Subject : Applicability of Service tax on fee collected by Public Authorities while performing statutory functions /duties under the provisions of a law - Regarding A number of sovereign/public authorities (i.e. an agency constituted/set up by government) perform certain functions/ duties, which are statutory in nature. These functions are performed in terms of specific responsibility assigned to them under the law in force. For examples, the Regional Reference Standards Laboratories (RRSL) undertake verification, approval and calibration of weighing and measuring instruments; the Regional Transport Officer (RTO) issues fitness certificate to the vehicles; the Directorate of Boilers inspects and issues certificate for boilers; or Explosive Department inspects and issues certificate for petroleum storage tank, LPG/CNG tank in terms of provisions of the relevant laws. Fee as prescribed is charged and the same is ultimately deposited into the Government Treasury. A doubt has arisen whether such activities provided by a sovereign/public authority required to be provided under a statute can be considered as pr....
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....t unless there is an exemption Notification the taxable services rendered by the Govt. or local bodies are liable to service tax. This clearly implies that the taxable service provided by Govt. or local authority is not exempt from service tax merely because it is provided by Govt. or local authority rendering the proposition that taxable service rendered by Govt./public authority as statutory mandate/obligation is exempt merely because it is so rendered by Govt./public authority totally devoid of any legal basis. Indeed, CBEC Circular No.192/62/2016-ST, dated 13.04.2016 (at Srl.No.5 of the table contained therein) clearly states that It is clarified that any activity undertaken by Government or a local authority against a consideration constitutes a service and the amount charged for performing such activities is liable to Service Tax. It is immaterial whether such activities are undertaken as a statutory or mandatory requirement under the law and irrespective of whether the amount charged for such service is laid down in a statute or not.. Thus, the CESTAT judgement in the case of Maharashtra Industrial Development Corporation (MIDC) Vs. CCE, Nasik (supra) does not have the stre....
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....collected by the appellant are on account of the said taxable service provided by it and therefore constitute consideration for taxable service. Once the taxable service is being provided against a consideration, service tax becomes payable. The clause 7 of Section 65 ibid defines the assess as follows:- "(7) assessee means a person liable to pay the service tax and includes his agent;" Thus the liability to pay service tax is either on the assessee himself or the agent of assessee. In the present case, the appellant is a company incorporated under Companies Act, 1956 and acted as agent on behalf of the Chhattisgarh Govt. which authorised it to lease out land to prospective entrepreneurs for setting up industry, etc. and to provide various services on behalf of State Govt. and it accordingly is covered under the definition of assessee reproduced above. The question whether an agent steps into the shoes of the assessee has been considered by the Supreme Court in the case of Asst. Commissioner, Ernakulam Vs. Hindustan Urban Infrastructure Ltd. & Ors. [2015-TIOL-06-SC-CT] and was answered in the affirmative; para 61 of the said judgement is reproduced below:- "61.....
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....is on Revenue to prove allegation of wilful mis-statement. The onus is not on the assessee to prove its bona fides. In the case of CCE Vs. Chemphar Drugs Liniments [2002-TIOL-266-SC-CX], the Supreme Court held that something positive other than mere inaction or failure on the part of the assessee or conscious or deliberate withholding of information when assessee knew otherwise, is required before it is saddled with the liability the extended period. In the case of Continental Foundation Jt. Venture Vs. CCE, Chandigarh-I [2007 (216) ELT 177 (SC)], Supreme Court went to the extent of ruling the mere omission to give correct information is not suppression of facts unless it was deliberate and than an incorrect statement cannot be equated with wilful mis-statement. Thus, we hold that the extended period of limitation is not invocable in the present case, which renders (part of) the demand pertaining to the extended period beyond the normal period time-barred and penalty under Section 78 ibid non-imposable. It is informed by ld. consultant that demand for the normal period is Rs. 15,44,135/-. The adjudicating authority has clearly held that penalty under Sections 76 and 78 ibid are i....