TaxTMI 
TaxTMI 
2024 (3) TMI 495
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.... in development of IT Sector. The department raised the dispute alleging inter alia that the Appellant had provided various taxable services viz. "Business Auxiliary Service" to the Govt. clients and failed to discharge their service tax liabilities. Accordingly, the demand of Rs. 2,12,48,489/- raised in the Notice was confirmed by the Ld. Commissioner of C.Ex and Service Tax, Guwahati vide the impugned order dated 25.03.2013. He also demanded interest and imposed penalty under section 78 of the Finance Act, 1994. 3. In their grounds of appeal, the Appellant submits that the taxability on Information Technology Software Service was introduced w.e.f 16.05.2008 and therefore, such service was not in the statute book prior to 16.05.2008 and no service tax is imposable on Information Technology Software Service up to 15.05.2008. Hence, demand confirmed by the Ld. Commissioner of Central Excise and Service tax for the period from 01.04.2006 to 15.05.2008 is beyond the scope of the Finance Act, 1994 and not sustainable in law. The Appellant further submits that they have already paid Service Tax amounting to Rs. Rs.98,55,321/- on the activities which are liable to service tax and the sa....
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....e provision of taxable service to a person and, therefore, no service tax is leviable on such activities. In view of the above said clarification, the Appellant submits that the service tax demand confirmed in the impugned order on this count is not sustainable. (b). Implementing IT Education under Education Department : The Appellant submits that they were appointed as a nodal implementing agency by the Education Department to the Govt. of Assam for implementation of the Scheme " Anundoram Barooah Award Scheme" to promote IT Education to inspire the youth in IT Sector amongst the meritorious students, vide Notification No. PMA(S)111/2010/55 dated 21.08.2010 issued by the Education Department to the Govt. of Assam. The Appellant has received an amount of Rs. 6,84,62,915, for execution of this IT Scheme and service tax of Rs. 68,74,524/- has been confirmed in the impugned order on this amount under the category of taxable Service "Business Auxiliary Service". The Appellant submits that the amount received in executing IT education implementing "Anandoram Barooah Award Scheme" is the Scheme of the Govt. of Assam and is not liable to service tax under the category of Business Auxil....
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....opriated by the Ld. Adjudicating Authority in the impugned Order-in-Original dated 25th March,2013. Further, they have also paid a sum of Rs. 11,11,390/ towards interest for late payment of service tax, which has also been appropriated in the impugned order. However, the Appellant disputed their service tax liabilities in respect of the activities listed at (a), (b) and (c) mentioned in Para 4 supra. 8.1. In respect of the service provided by the Appellant to the Ministry of Transport to the Govt. of Assam, we observe that the services rendered are in relation to issue of Driving License (DL) and Registration Certificate of Vehicles (RC) under the Motor Vehicles Act, 1988. We find that the Appellant has performed the functions of Ministry of Transport, which is a statutory function of the Govt. Hence, we observe that the fees collected by them is not taxable service under the category of Business Auxiliary Service. We observe that the Appellant has referred Circular No. 89/7/2006-ST, dated 18.12.2006 issued under F.No. 255/1/2006-CX.4,in support of their contention that they are not liable to pay service tax for these services, but the adjudicating authority has not considered thi....
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.... service, which is not in the nature of statutory activity and the same is undertaken for a consideration not in the nature of statutory fee/levy, then in such cases, service tax would be leviable, if the activity undertaken falls within the ambit of a taxable service. 4. Trade and field formations may be advised accordingly. 5. Hindi version will follow". 8.2 We find that the clarification in the Circular mentioned above squarely covers the issue on hand. We find that the activity performed by the Appellant is a function to be performed by a public authority under the provisions of law and hence it does not constitute a taxable service for the purpose of levy of service tax. Accordingly, we hold that no service tax is leviable on such activities. In view of the above said clarification issued by the Ministry, we hold that the service tax confirmed in the impugned order on this count is not sustainable and we set aside the same. 8.3 Regarding the demand of service tax on the activities of Implementing IT Education under Education Department mentioned at (b) in Para 4 supra, the Appellant submits that they received the amount in connection with implementing "Anandoram Barooah ....
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.... a grant. The fact that State Governments are implementing agencies for the Central Government within the framework of CSS does not make them service providers. Consequently, Central Government cannot be taken as service receiver. Grant released by the Central Government under a centrally sponsored scheme cannot be presumed as consideration for providing a taxable service. 3. Levy and collection of service tax on State Government agencies/ departments implementing CSS under a central grant, is not legally tenable and therefore in such cases service tax should not be demanded. 4. Trade Notice/Public Notice may be issued to the field formations. 5. Please acknowledge receipt of this Circular. Hindi version follows. 8.4. We observe that the above Circular categorically clarified that Levy and collection of service tax on State Government agencies/ departments implementing Centrally Sponsored Scheme under a central grant, is not legally tenable and therefore in such cases service tax should not be demanded.. We observe that eventhough the Appellant cited the Circular in their reply to the Notice, the adjudicating authority has not given any finding regarding the applicability of....