TaxTMI 
TaxTMI 
2021 (2) TMI 1023
X X X X Extracts X X X X
X X X X Extracts X X X X
....appellants are engaged, inter alia, in manufacture and sale of alcoholic beverages. Pursuant to the enquiry initiated by the DGCEI, Bangalore, Zonal Unit, a SCN dated 18.06.2018 was issued to the appellant, inter alia, demanding service tax of Rs. 17,77,85,108/- under reverse charge mechanism on the following fees paid to the State Excise department: (i) Brewery License Fee (ii) Bond Registration Renewal Fee (iii) Storage License Fee for CO2 (iv) Factory License Renewal Fee (v) Excise Staff Salary and Overtime allowance/charges (vi) Permit Fee (vii) Brand Registration Fee (viii) Barcode Fee (ix) Bottling Fee (x) Export Pass Fee (xi) Import Pass Fee (xii) Appeal Filing Fee 2.1. It was further alleged in the SCN that the aforesaid fees paid by the appellant are with respect to the purported service provided by the State Government and in view of the amendment made to Section 66D of the Finance Act vide Finance Act, 2015, read with Notification No.06/2016-ST dated 18.02.2016, the appellant is liable to pay service tax under reverse charge mechanism on the same. During the cou....
X X X X Extracts X X X X
X X X X Extracts X X X X
....me Court in the case of Har Shankar Vs Excise & Taxation Commissioner, (1975) 1 SCC 737, wherein the Hon'ble Apex Court held , that the licensee fee is not a fee properly so-called nor indeed a tax but is in the nature of the price of a privilege, which the purchaser has to pay in any trading or business transactions. It is his further submission that the license fee charged by the State Government is not subject to tax as the same is not for any service. Pursuant to the retrospective amendment vide Section 117 of the Finance Act, 2019, it became even more clear that no service tax is leviable or payable on the license fee paid to the State Excise Department. He further submitted that the learned Commissioner has rightly dropped the service tax demand on license fee but has erred in confirming the demand with respect to the Import Pass fee, Export Pass fee and Permit fee etc. He also submitted that the learned Commissioner has erred in holding that permit granted for import/export of liquor cannot be treated as license. He further submitted that the learned Commissioner has erred in not appreciating that like the License fee, Import Pass fee and Export Pass fee are also the conside....
X X X X Extracts X X X X
X X X X Extracts X X X X
....wherein CBIC has clarified that taxes, cesses or duties levied are not consideration for any particular service as such and hence not leviable to Service Tax. Hence, he has prayed that no service tax should be levied on Excise Staff Salary and Overtime charges. Similarly, he has prayed that no service tax is payable on Storage License Fee for CO2. Learned Counsel also contested the penalties imposed on the appellant on the ground that when the demand itself is not sustainable, the question of imposition of penalty does not arise and further the issue involved is of interpretation of law and therefore penalty is not imposable. 5. On the other hand, learned AR reiterated the findings of the impugned order. 6. After considering the submissions of both the parties at length and after going through various provisions of the Finance Act, 1994 and the various decisions relied upon by the appellant cited supra, we find that the only issue involved in the present case is whether the appellant is liable to pay service tax under Reverse Charge Mechanism on the Export Pass fee and Import fee, Storage License Renewal fee, Excise Staff Salary and Overtime charges, Permit fee paid to the St....
X X X X Extracts X X X X
X X X X Extracts X X X X
....o the effect that service tax was not leviable on services provided by the State Government by way of grant of liquor licenses against consideration in the form of license fee or application fee "by whatever name called", during 01.04.2016 to 30.06.2017 along with this amendment the dispute regarding the leviability of service tax on fee paid to State Government in relation to alcoholic liquor for human consumption has come to an end and it is clear that service tax is not leviable on the said fees from April 2016 to June 2017. Specific inclusion of word "by whatever name called", the Legislature made it abundantly clear that any fee paid under the purview of State Excise legislation would not be leviable to service tax. Further, it is pertinent to note that the word "License Fee" is defined by Oxford Dictionary to mean "a fee paid to an organization for permission to own, use or do something". The Hon'ble Apex Court in the case of State of Orissa Vs Narain Prasad cited supra specifically explained the meaning of expression "Privilege" and held that "Privilege really means the license or permit granted by the State". Further, in view of State of Punjab and Orissa Vs Devans Modern B....