TaxTMI 
TaxTMI 
TaxTMI 
2024 (9) TMI 774
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..... For the purpose of mining of coal, the appellant sought forest clearance so that forest land falling under the said project could be utilized for non-forest purposes. Accordingly, such clearances were granted by the Ministry of Environment, Forest and Climate Change on payment of charges known as 'Net Present Value' (NPV) in the Compensatory Afforestation Fund (CAMPA Fund). 2. On the basis of intelligence received by the Officers of the DGGI, an investigation was initiated by the Department in respect of the Service Tax payable on the NPV paid by the appellant in the CAMPA Fund. Accordingly, a Show Cause Notice dated 21.10.2021 was issued to the appellant inter alia proposing to demand Service Tax of Rs.1,36,13,506/-, inclusive of cess, ....
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....order and allowing their appeal. 6. The Ld. Authorized Representative of the Revenue reiterated the findings in the impugned order. 7. Heard both sides and perused the appeal records. 8. We observe that the appellant has made payments of NPV to the CAMPA Fund, as a result of the constitutional mandate enshrined in Article 48 of the Constitution of India. We also observe that the charges are collected in pursuance of the decision of the Hon'ble Supreme Court. From the impugned order, we observe the adjudicating authority has considered the payment of NPV as a consideration for the 'Declared Service' as defined under Section 66E(e) of the Finance Act, 1944. The observation that the Government is 'tolerating the act' of the appellan....
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.... Climate Change for usage of the forest land falling under the said project for non forest purposes, as a 'Declared Service and the charges of NPV paid by the Appellant as 'Consideration' for the said service and demanded service tax under Reverse Charge. The allegation of the Revenue is that the payment made to CAMPA Fund is for the purpose of toleration of an act or a situation. In the present 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 le....
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.... made by the user agency to Ministry of Environment & Forest, Govt. of India, and final approval for such non-forestry use of such forest land is given by Ministry of Environment & Forest, Govt. of India, on payment of specified charges as mentioned above and after receiving recommendation of the concerned State Government. 8.2. We find that Tribunal Kolkata has decided a similar issue in the case of MNH Shakti Ltd Vs Commissioner of Central Excise and Service tax, Rourkela, wherein it has been held as under : "6. 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 had a choice to tolerate or not; (c) Such tolerance....
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....hment at the time of retirement and to charge service tax on the amount received as leave encashment. These, cannot be called taxable services of tolerating a situation by any stretch of imagination. No service tax can be levied on the amounts received by the appellant as compensation." 9. We observe that the facts of the present appeal are similar to that of the decision cited supra. Therefore, relying on the above decision, we hold that the clearance granted by Ministry of Environment, Forest and Climate Change for usage of the forest land falling under the said project for non-forest purposes, cannot be considered as a 'Declared Service' as defined under Section 66E(e) of the Finance Act, 1944 and the charges of NPV paid by the ....