TaxTMI 
TaxTMI 
2022 (4) TMI 368
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....42,03,471/- of said amount to National Highway Authority of India (NHAI) thereby retaining an amount of Rs. 1,51,03,494/-. 2. Department formed an opinion that the appellants are providing business auxiliary services as defined under Section 65 (19) of Finance Act, 1994 to the users of their client NHAI but were not depositing the Service Tax. Accordingly vide Show Cause Notice No.55 dated 22.05.2020 service tax amounting to Rs. 23,37,772/- was proposed to be recovered alongwith the interest and the proportionate penalties. The said proposal was confirmed by the Original Adjudicating Authority, however, only for the amount of Rs. 18,66,791/- with the proportionate interest and the penalty of the same amount. The demands of Rs. 4,87,832/- was dropped being the amount incurred against legal and professional expenses pertaining to miscellaneous amounts paid to various Chartered Accountants / Consultants / Membership Fees / Stamp Duty for Loan which were not chargeable to Service Tax. The Appeal there of has been rejected upholding the said order. Being aggrieved, the appellant is before this Tribunal. 3. I have heard Mr. Rahul Lakhwani, Advocate & Shri Raghav Rathi, C.A. for the....
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....-ST dated 22.02.2012. The services of appellant have clearly been denied to be covered under negative list as prescribed under section 66 B of the Finance Act, 1994. Impressing upon the correctness of the said findings, the appeal in hand is hereby prayed to be dismissed. 6. After hearing the rival contentions, it is held as follows:- The moot point of adjudication is : "whether the collection of toll under a contract executed by NHAI in favour of the appellant amounts to providing Business Auxiliary Service by the appellant ?" 7. The demand against the appellant has been confirmed based on the findings that the appellants were not the owner of the land made available for construction of road nor they had constructed road. They were merely granted contract for collection of toll charges on behalf of NHAI. Hence they were merely an independent entity to collect toll from the users of the road on behalf of NHAI merely as the Commission Agent in terms of clause (a) (ii) (iv) of the explanation given under section 65/19 of the Finance Act, 1994. 8. To decide the controversy, foremost, the contract executed by NHAI in favour of appellant is perused. Following are obser....
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....our of NHAI alongwith the Bank Guarantee. The said amount of security is equal to one month agreed remittance valid for a period of 14 months from the date of the contract. Clause 23 prescribes various other obligations of the contractor/ the appellant. The contract even gives rights to appellant as well as NHAI (both the parties to contract) to terminate the contract in case of Force Majure event subject to notice for the same. 10. The above clauses of the contract make it clear that NHAI has not appointed appellant as its agent. The contract is absolutely on principal to principal basis. There is opined no circumstance to hold that appellant was providing Business Auxiliary Services. 11. Coming to the aspect of service, it is observed that Section 66 B of Finance Act defines service to mean any activity carried out by a person for another for consideration, and includes a declared service, but shall not include - (a) And activity which constitutes merely, - (1) Its transfer of title in goods or immovable property, by way of sale, gift or in any other manner; or (2) Such transfer, delivery or supply of any goods which is deemed to be a sale with....
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.... be commission income. They have purchased the right to collect the toll in auction which in no way can be termed as rendering of service to NHAI or MSRDC. Rather the respondents in terms of the agreement are liable to pay the amount fixed at auction to the NHAI/MSRDC irrespective of the fact that such collection of Toll is profitable to them or not. This leaves no doubt that for the above reason also the Toll collection by the respondents is not arising from any "Business Auxiliary Service". We further find that even M/s. NHAI and MSRDC do not consider the toll collection by the respondents on their behalf as commission agent. They consider the respondents as in business of toll collection and even tax is collected at source u/s. 206C of the Income-tax Act from the instalments paid by the respondents. The said section is in respect of collection of tax of income tax at the time of receipt of amount." 13. The Principal Bench also earlier in the case of Intertoll India Consultants (P) Ltd. v. Commissioner of Central Excise, Noida reported in 2011 (24) S.T.R. 611 (Tri.-Del.) has held as follows:- 10. As regards the collection of toll by the appellant on behalf of M/s. Ban....
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....ase, the Appellant was carrying out the said activity as an independent principal. No fixed amount has been retained by the Appellant, on the contrary, he is required to pay a fixed amount on weekly basis to NHAI. Thus, consideration is flowing from the Appellant to NHAI and not vice-versa. Therefore, the said circular is not applicable in the scenario and the department has erred in applying the circular in the present case. With reference to the same, in case of Commissioner of Service Tax v. Ideal Road Builders Pvt. Ltd. [2018 (12) G.S.T.L. 192 (Tri.- Mumbai), it was held:- "The reliance placed by the Revenue upon Board Circular No. 152/3/2012-S.T., dated 22-2-2012 is not correct for the reason that the respondents has not collected such toll charges on commission or charges on behalf of NHAI/MSRDC. The toll collection is their own income and is not parted with NHAI/MSRDC as they are concerned only with the bid amount finalized in auction and therefore cannot be termed as activity of Business Auxiliary Service" 17. Finally it is observed that demand in question has been raised by invoking the extended period of limitation but it is observed. Extended period of ....