TaxTMI 
TaxTMI 
2018 (2) TMI 1498
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....se in Central Excise Appeal No.164 of 2015. 2 The demand subject matter of Appeal No.164 of 2015 was made by a notice dated 19th April, 2013 for the period from October, 2011 till September, 2012. The Respondent MIDC is registered with Service Tax Department under the category of "renting of immovable property". The allegation under the show cause notice is that MIDC has not paid service tax on services charges collected from the holders of the plots situated at various Industrial areas/estates of the MIDC. Reliance is placed on clause 64 of Section 65 of the Finance Act, 1994 (for short "the said Act") which defines "management, maintenance and repairs". The contention raised in the show cause notice is that service charges are recovered by the MIDC from plot holders for providing various services to them and the activity of providing service attracts service tax liability under the aforesaid category defined under clause 64 of Section 65 of the said Act. It is alleged that on inquiry and verification it was found that though service charges were recovered by MIDC from the plot holders for relevant period, service tax was not paid. The specific case in the show cause notice is th....
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....er in the OrderinOriginal and in particular paragraph 4.13. Inviting our attention to the findings recorded by the Appellate Tribunal, he urged that the findings of fact recorded by the Additional Commissioner in the OrderinOriginal have not been disturbed and the Appellate Tribunal has proceeded on assumption that the service charges are levied and collected by the MIDC for performance of statutory obligations. He would, therefore, submit that substantial questions of law as set out in the Appeals will squarely arise. 4 The learned counsel appearing for the Respondent supported the impugned judgment and order of the Appellate Tribunal. He relied upon the decisions of the Apex Court in the case of Ramtanu Cooperative Housing Society and Anr. Vs. State of Maharashtra and Ors. AIR 1970 SC 1771 as well as the Managing Director, Haryana State Industrial Development Corporation and Ors. Vs. Hari Om Enterprises and Anr. AIR 2009 SC 218. He submitted that MIDC is a wing of the State Government which performs sovereign functions and hence, no interference is called for. 5 We have given careful consideration to the submissions. Firstly, it will be necessary to note what is set out in the ....
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....ered by such category, MIDC is admittedly paying service tax. 8 At this stage, a reference will have to be made to certain provisions of the MID Act. The preamble of the Act shows that for securing orderly establishment of Industrial Areas and Industrial Establishments of Industries in the State of Maharashtra and for assisting generally in the organization thereof, MID Act has been enacted for the establishment of a Corporation (MIDC). As stated earlier, MIDC is set up under SubSection (1) of Section 3 of the MID Act. The functions of MID have been enlisted in Section 14 which reads thus : "14. The functions of the Corporation shall be (i) generally to promote and assist in the rapid and orderly establishment, growth and development of industries in the State of Maharashtra, and (ii) in particular, and without prejudice to the generality of clause (i), to (a) establish and manage industrial estates at places selected by the State Government; (b) develop industrial areas selected by the State Government for the purpose and make them available for undertakings to establish themselves; (d) undertake schemes or works, either jointly with other corporate bodies or ins....
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.... their Directors for the regulation and management of the Corporation. Such a Corporation set up by the shareholders carries on business and is intended for making profits. When profits are earned by such a Corporation they are distributed to shareholders by way of dividends or kept in reserve funds. In the present case, these attributes of a trading Corporation are absent. The Corporation is established by the Act for carrying out the purposes of the Act. The purposes of the Act are development of industries in the State. The Corporation consists of nominees of the State Government, State Electricity Board and the Housing Board. The functions and powers of the Corporation indicate that the Corporation is acting as a wing of the State Government in establishing industrial estates and developing industrial areas, acquiring property for those purposes, constructing buildings, allotting buildings, factory sheds to industrialists or industrial undertakings. It is obvious that the Corporation will receive moneys for disposal of land, buildings and other properties and also that the Corporation would receive rents and profits in appropriate cases. Receipts of these moneys arise not out o....