TaxTMI 
TaxTMI 
2019 (2) TMI 949
X X X X Extracts X X X X
X X X X Extracts X X X X
....rch, 2013 1,57,980/- During the period mentioned above, only the service tax amount was confirmed as per the impugned order. 2. The brief facts are that the appellants are engaged in providing services to the State Government Department such as Department of Mines & Geology (DMG) and Commercial Tax Department. They were engaged in collecting statutory levy on behalf of the Government. It was held in the impugned order that these services were defined as the services under the heading of "Business Auxiliary Services" and accordingly, the demands were confirmed. 3. The ld. Advocate contested the impugned order on the following grounds:- The impugned proceedings are vague and in gross violation of principles of natural justice. 1. That the impugned proceedings are vague and in gross violation of principles of natural justice. 2. That the purpose of a Show Cause Notice is to grant an opportunity to the Noticee therein to defend its case. The allegations in the SCN have to be clear and cogent, pointing out the exact liability of the Noticee in terms of the legal provisions. It is expected of a SCN to, at least, point out the relevant legal provisions and explain how....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Act defines BAS to include different activities under its 7 sub-clauses. It is, therefore, imperative for the SCN to point out the exact sub-clause, under which demand is sought to be recovered. However, the present SCNs have grossly failed in fulfilling these requirements of the principles of natural justice. The SCNs have alleged classification under Section 65(19) of the Act, without pointing out the exact sub-clause under which the liability is sought to be fastened. 9. That vagueness in the SCNs (issued for the first period) have been carried forward in the SCNs for the subsequent period, where the demand pertains to the period falling under the negative-list regime. Even in respect of such demands, the allegations in the SCN are that the activities of the Appellant are taxable as BAS as defined under Section 65(105)(zzb) read with Section 65(19) of the Act. However, as already noted, the said provisions are not applicable for the period from July, 2012. In fact, there is no allegation in the SCNs or finding in the Impugned Orders as to how the subject activities of the Appellant are chargeable to tax under the relevant legal provisions as applicable from July, 2012. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....phasis supplied] 12. Reliance has also been placed on the decision of the Hon'ble Karnataka High Court in Commissioner v. The Peoples Choice, 2014 (36) STR 10 (Kar), wherein it was held that the SCN, which was issued on the basis of obsolete provisions not applicable during the relevant period, was invalid. 13. In view of the above, the demands in the present case, being vague, are liable to be set aside. When the SCNs are not sustainable, the question of sustaining the Impugned Orders does not arise. The Appellant collected royalty and toll in its own right and not on behalf of DMG/ RIDCOR. 14. That the confirmation of demand in the Impugned Order is based on the assumption that the Appellant collected royalty/toll on behalf of DMG/ RIDCOR and thus such activities of the Appellant as commission agent are taxable under the category of BAS. 15. That such assumption in the Impugned Order is factually incorrect. Reference is invited to agreements of the Appellant with DMG/ RIDCOR. The Appellant successfully participated in the bid invited by DMG/ RIDCOR and was awarded the right to collect royalty/toll. For grant of such right, the Appellant agreed to pay the prescribed....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ct of such goods/ services on behalf of A. In such a case, C renders commission agent services, i.e. BAS, to A. What is, thus, necessary is that service recipient of BAS, i.e. A in the above illustration, must sell goods/ provide services in relation to which the service provider of BAS, i.e. C, has to carry out the specified activities. 20. That in the present case, however, the alleged service recipients of the Appellant do not sell any goods/ provide services. RIDCOR is the nodal agency of the Rajasthan Government responsible for construction and maintenance of highways in Rajasthan. The DMG is a department of Government of Rajasthan to regulate the mines in Rajasthan and to grant mining license. These persons do not sell any goods/ render services in respect of which the Appellant collects alleged royalty/toll. In such a case, the activities of the Appellant do not qualify as those of commission agent and thus, the confirmation of demand under the category of BAS is not sustainable. 21. That without prejudice to the above, it is submitted that to fall under BAS, the alleged activities must pertain to business of the service recipient. In the instant case, however, the all....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of government is exempt under Notification No. 13/2004-ST, dated 10.09.2004. Further, these are in nature of sovereign activities, on which no Service Tax is payable. 24. That the subject activities of the Appellant are exempt under Notification No. 13/2004-ST, dated 10.09.2004. This notification exempts the services provided by any person to the Government of a State in relation to collection of any duties or taxes levied by the Government from the whole of the Service Tax leviable thereon under Section 66 of the Act. 25. That in the instant case, the Appellant allegedly collects toll on behalf of RIDCOR, which is also in nature of tax, as provided in Entry No. 59 of List-II of Seventh Schedule to the Indian Constitution. Reliance is placed on decision of Hon'ble Tribunal in Commissioner v. Indian Oil Corporation Limited, 2017-VIL-513-CESTAT-MUM-ST [Page 53-55]. Further, royalty is also in nature of tax only as held by Hon'ble Supreme Court in D K Trivedi v. State of Gujarat, AIR 1986 SC 1323A [Page 61-104]. 26. That such collection of taxes and statutory levies by the Appellant on behalf of government/ statutory authorities is exempt from payment of Service Tax under....