TaxTMI 
TaxTMI 
2023 (7) TMI 1336
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....tended that such payment of NPV to Govt. of India, appeared to be in lieu of 'Declared Service' of toleration of the act of use of forest land for non-forest purposes rendered by Government and attracts service tax under reverse charge mechanism in terms of Notification No.30/2012-Service Tax dated 20.06.2012, which the Appellant failed to discharge. 2. A Show Cause Notice dated 04.10.2021 was issued to the Appellant demanding service tax of Rs.3,37,43,465/- for the period 01.04.2016 to 30.06.2017, along with interest and penalty. The said Notice was adjudicated by the Commissioner, Rourkela vide Order-inOriginal dated 08.03.2022, wherein he ordered as under: I find that the service of 'Agreeing by Union of India to tolerate the act of Odisha State Government of diversion of forest land for mining purpose .......', in the instant case provided by the Government to the Noticee, having registered at GM Officer, Orient Area, Brajraj Nagar, Jharsuguda-768216, Odisha is a declared service by virtue of Section 65B(22) read with Section 66E(e) of the Finance Act, 1994 and is covered within the definition of 'Service' under Section 65B(44) and 'Taxable Service' under Section 65....
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....tion of law. (iii) The observation that the Government is 'tolerating the act'of the appellant against a 'consideration' is totally absurd inasmuch as one cannot envisage the situation as apprehended in the SCN that by collecting NPV, the Government is tolerating the act of appellant. (iv) The CESTAT, Kolkata in the case of MNH Shakti Limited vs. Commr, CGST & CX, Rourkela (Service Tax Appeal No. 75218 of 2020),while deciding the applicability of Section 66E(e) on the issue of compensation received by the erstwhile coal mine allottees in pursuance to the law pronounced by the Hon'ble Supreme Court and the subsequent Coal Mines Special Provisions Act (CMSPA) passed by the Parliament held that: "The question of tolerating something and receiving a compensation for such tolerance pre-supposes that: a) the person had a choice to tolerate or not; b) the person chose to tolerate; c) such tolerance was for a consideration as per an agreement (written or otherwise) to tolerate; d) the tolerance was a taxable service. None of the above elements are present in the present case. The appellant had no choice of tolerati....
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....ing without accepting, that Government is providing a service, it cannot be said, by any stretch of imagination that the appellant is the service recipient since the benefit of regeneration of ecosystem/natural vegetation is being received by public at large as also observed by the Hon'ble Supreme Court in the case of T.N. Godavarman . Since the Appellant is not the service recipient, no service tax liability can be fastened under reverse charge mechanism. Further the amount paid by the appellant has no nexus to the alleged services, if at all, received by it. (vii)There is no 'consideration' paid for any service in this case inasmuch as the payment of NPV is a 'contribution'/'compensation' paid to the Government for the loss of forest vegetation pursuant to the constitutional mandate. Therefore, the very definition of service under Section 65B(44) of the Act has not been fulfilled in the instant case in absence of 'consideration'. (viii) Accordingly, the Appellant submitted that Section 66E(e) is not applicable in the facts of the instant appeal , and they prayed for setting aside the impugned order. (ix) Even if it is assumed that the Government has pro....
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....esent case the act of the Appellant tolerated by the Government is the act of conversion/diversion of forest land and use of the same for non-forestry purposes and consideration has been paid for the purpose of tolerating the mining activity by the Government. And for such act of toleration by the Govt., the appellant have paid compensatory levies/charges to CAMPA Fund which is being administered under the aegis of Central Government. Accordingly, the impugned order justified the demand and confirmed the same. 8. We observe that the payment of NPV to the CAMPA Fund has been made by operation of law and the Appellant has no choice whatsoever. Thus, the amounts paid cannot be called as 'consideration' by any stretch of imagination, for the alleged 'service'. Furthermore, the Government is duty bound by the Constitutional Mandate (Article 48 of the Constitution of India) and by the Parliament (The CAMPA Act, 2016, Forest Conservation Act 1980) to collect the charges for granting diversion of forest land for non-forest purposes like mining to preserve, conserve and regeneration of lost ecological balance. 8.1 When a patch of forest is diverted for non-forestry purposes, its impli....