TaxTMI 
TaxTMI 
2019 (11) TMI 1573
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....nder: (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 Maharashtra Motor Vehicle Rules, 1989 for issuance of SOC-VRC and levy of fee. As per this rule, an applicant would have to pay a statutory fee of ....
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....nfirmed 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 this is a statutory function of the State Government, the same would not qualify as service/business by the Government; (ii) In this regard, reliance ha....
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....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 treasury. 10. The submissions advanced by the learned Counsel for the Appellant as also the learned Authorised Representative of the Department have been considered. 11. To appreciate the rival contentions, it ....
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....-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 the Commissioner in said order are reproduced below: "5.11 Now I have to examine whether the issue of Smart Card Based registration Certificates to the vehicle owner on behalf of the Govt. of Maharashtra and Gujarat is a taxable service under the category of Business au....
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....s, 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. This submission was made in view of the order dated 25 October 2012 passed by the Commissioner (Appeals), which order had attained finality. It is in this context that the Tribunal held that once the Department has permitted the order to attain finality, it cannot be permitted to contend that the Appellant s....
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....pellants 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 had not been squarely dealt with on facts at any stage by any of the authorities below, it was not possible for learned Counsel to give us the reasons for drawing this distinction between the two manufacturers and differently classify what were alleged to be materially the same product. 7. In the circumstances we deem it appropriate to ....
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....ered 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 that their work is directly linked to the preparation of smart cards which are essential to fulfill the statutory work of Government of Maharashtra. We find that the analysis of factual and legal position by the Original Authority cannot be faulted. We also examined the proposal made by the Revenue in the demand notice for tax liability of the respondent. We....