TaxTMI 
TaxTMI 
2019 (11) TMI 1573
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....ion certificates4 to applicants in the State of Maharashtra. The relevant recitals of the agreement are as under: (i) The State Government has agreed to issue directions, amendments, changes, notifications, executive order, under the applicable law for the implementation of the terms and conditions of the agreement and specifically for the levy of fee and appropriation of the same by Shonkh. (ii) The State Government has agreed that for the service rendered, Shonkh will have the right to charge, collect and appropriate the fee directly on behalf of the Government from the concerned customers and would have no obligation to remit such amount to the Government. (iii) Taxes in the form of excise, sales tax and service tax or any other tax or levy under any law would not be applicable to the service nor to the obligations undertaken by Shonkh on behalf of the State Government. (iv) Shonkh may delegate and sub-contract any of the rights, duties and obligations under the Agreement with the prior permission of the State Government. 3. Consequently, the State Government issued a notification dated 27 November, 2002 inserting Rule 285B in the Maharasht....
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....government treasury and therefore, the benefit of the Circular dated 18 December, 2006 was not available to the Appellant. 7. The demand was confirmed by the Commissioner by order dated 18 February, 2013 on the ground that the Appellant provided a service of issuance of smart cards to the applicants on behalf of the State Government on an agreed consideration of Rs. 350/- per card and the State Government was its client in the entire transaction. This service provided by the Appellant would be classifiable as BAS under Section 65(19)(vi) of the Act. The Commissioner found that the Appellant was not a sovereign or public authority and the amount of Rs. 350/- collected by the Appellant per card was not deposited in the government treasury but was appropriated by the Appellant and was in addition to the statutory fee prescribed by statute collected by the Government. 8. Shri B.L. Narasimhan, learned Counsel appearing on behalf of the Appellant has made the following submissions to assail the order passed by the Commissioner: (i) The State Government was required to issue SOC-VRC as per the provisions of the Motor Vehicles Act read with the Motor Vehicles Rules and since....
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.... M/s. Virgo Softech Ltd. 2017 (9) TMI 1068 CESTAT NEW DELHI, relying upon the decision of the Madhya Pradesh High Court in Smart Chip Ltd., held that the activity of the Appellant cannot be taxed under BAS. This order of the Tribunal has also attained finality since no Appeal was filed by the Department against this order. 9. Shri Bhasha Ram, the learned Authorised Representative for the Department has, however, supported the impugned order passed by the Commissioner and made the following submissions: (i) The Appellant is a service provider and the State Government is a client and a service recipient in terms of the agreement. The Appellant had provided service to the applicants on behalf of the State Government and, therefore, the service provided by the Appellant would clearly fall under the definition of BAS as contained in section 65(19)(vi) of the Act; and (ii) The Circular dated 18 December, 2006, on which reliance has been placed by the Appellant, cannot come to aid of the Appellant since the Appellant is not sovereign or a public authority and the amount of Rs. 350/- collected by the Appellant for a smart card was not deposited in the Government treasu....
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....ssigned the rights and obligations of the project to the Appellant under a concession agreement dated 30 May, 2006 and thereafter, the Appellant entered into a consortium agreement dated 29 November, 2006 with Virgo to take up the project as a joint endeavour with pre-decided revenue sharing terms. 13. The period involved in the present Appeal is from 1 October, 2006 to 30 September, 2011. It is also important to note that for the subsequent period from October 2011 to March 2014, another show cause notice was issued to the Appellant on the same issues as contained in the show cause notice dated 13 April 2012 issued in the present case with regard to the said agreements dated 30 November, 2002 and 30 May, 2006. This notice came to be decided by the Commissioner by order dated 31 December, 2015. The Commissioner noticed that the issue that was required to be decided was as to whether the service provided by the Appellant by way of issuing SOC-VRC to the various vehicle owners on behalf of the Regional Transport Offices of the State Government would be leviable to Service Tax under the category of BAS in terms of section 65(105) of the Act prior to 1 July, 2012. The findings of th....
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....ion under the Motor Vehicle Act, 1988 the same does not amount to taxable service under the category of "business auxiliary service". I therefore hold that no tax is recoverable from the Noticee for this activity during the pre negative list era." 16. Learned Counsel for the Appellant, on instructions, has stated that the aforesaid order dated 31 December, 2015 of the Commissioner has also attained finality as the Department did not file any Appeal. 17. The submission of the learned Counsel for the Appellant is that in such circumstances, the Department cannot agitate that the Appellant is liable to pay Service Tax under BAS. To support this contention, learned Counsel has placed reliance upon a decision of Allahabad Bench of this Tribunal in Shri Niraj Prasad vs. CCE & ST, Kanpur Service Tax Appeal No. 3834 of 2012 decided on 17 July, 2019. In the aforesaid case, it was sought to be submitted by the Appellant that the Department cannot be allowed to discriminate between various assesses on the same issues. A view was taken that the centres of the Appellant would not be required to pay Service Tax under BAS, if Service Tax had been paid on the entire amount by the agency. Thi....
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....ons in consonance with the principles of uniformity, equity and justice". 4. It is difficult to understand the reasoning of the Tribunal. The least that the Tribunal could have done in the interest of uniformity' was to call upon the Revenue Authorities to explain why they were making a distinction between the Appellants product and that of M/s. Chandulal K. Patel without subjecting the Appellants' product to any chemical analysis. 5. In their Appeal from the decision of the Tribunal before us the Appellants have again raised the issue that the Tribunal should have considered the fact that the Appellants and Chandulal K. Patel & Co's products were identical and were the outcome of an identical process, and that since the latter had been exempted from paying any central excise duty on the ground that their product was classifiable under Tariff Heading 24.04, the Appellants should get the same benefit. 6. At the hearing today we sought an explanation from the learned Counsel appearing on behalf of the Revenue Authorities as to why different stand had been taken in the cases of M/s. Chandulal K. Patel & Company and the Appellant. Since the matter....
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....rt. 20. At this stage, it will also be appropriate to refer to the order passed by the Tribunal in Virgo, where the Appellant assigned the rights and obligations by agreement dated 30 May, 2006. Virgo was paid Rs. 60/- per card by the Appellant for assisting the Appellant in the issuance of smart cards. The Revenue entertained a view that Virgo rendered a taxable service under the category of BAS in terms of section 65(19) of the Act. Accordingly, demand proceedings were initiated, but the Commissioner dropped the proceedings. The Department filed an Appeal before the Tribunal, which Appeal was dismissed and the observations are as under: "5. The above findings are contested by Revenue. The main objection is that in an arrangement between two private parties there is no question of discharging sovereign or statutory function. We note that this plea is misdirected and misconceived. Admittedly, the respondent is very much involved in execution of the project of smart card for vehicle registration. Though they are not executing the full project for Government of Maharashtra in terms of direct agreement with the Regional Transport Authorities, it is clearly an admitted fact....