AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1005
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....through the licensees employing the medium of the Appellant and in this regard, the Indian railways has entered into a Memorandum of Understanding [MOU, for short]. It is claimed that in terms of the said MOU, the Appellant-IRCTC had awarded licenses to construct food stall/Plaza over vacant land within the premises of railway stations and licensee is to operate stall or kiosks which granted by inviting tender as per the Policy of the Railways. The successful bidder was permitted to put up stalls as per the specifications prescribed by the Railways. Such license holder would sell food and beverages in the static catering stalls at the rate fixed by the Indian Railways as approved by the Appellant, for which, Appellant would charge 'License fees' and 'User charge'; the license fee is claimed to be based on the percentage of actual sales turnover and user charges are collected for the area, which are paid by the licensee every month irrespective of the turnover; and both these license as well as user fees are shared by the Appellant and the Indian railways in the ratio of 60:40. It was also claimed by the Appellant that they are also providing various other services like cab-operator....
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....een remitting the applicable Service Tax. It is claimed to be part of Ministry of Railways and as mandated by the Catering Policy of Railways, 2005, it has been awarding licenses for catering stalls and food Plaza at the railway stations. Further, it is their case that only land is rented out where the license holder would set up the stall/Food Plaza, as and when the property development takes place, the character of land undergo change, which does not mean that there was a lease of land with buildings. The activity of leasing of vacant land was not taxable service under RIPS upto 01.07.2010 in view of the specific exclusion under Explanation 1 to Section 65(105)(zzzz) of the Finance Act, 1994 whereby, the leasing of vacant land stood excluded. 5. Smt. Radhika Chandrasekhar, Ld. Advocate also took us through the commercial Circular No.56/2005 dated 21.12.2005 issued by the Ministry of Railways wherein, according to her, the provision for providing good and hygienic food at a competitive rate to the passengers using Indian Railways is prescribed. Further, the License Agreement was also referred to, which provides that the Appellant-IRCTC has to provide space as per site plan and th....
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....d such license holder has to sell food and beverages in the static catering stalls at the rate fixed by Ministry of Railways and the rate as approved by the Appellant. 7. Without prejudice to the above, Smt. Radhika Chandrasekhar would submit that the Appellant being an extended arm of Indian Railways and providing various services to Indian passengers with the object of providing quality/hygienic, palatable food or food items to the travelling public at the price fixed by the railways, activity is only in the nature of managing catering for the benefit of public and therefore, is nothing but a sovereign function. Our attention was invited in this regard to an Order of Bangalore Bench in the case of M/s. Electrical Inspectorate Vs. CST, 2007-TIOL-CESTAT-BANG wherein the Tribunal has held that the Assessee therein is a State Government Department, was only carrying the sovereign activity of inspection and certification of electrical installations as specified under the particular legislation and therefore, the Appellant is not liable for Service Tax under 'RIPS'. She would also submit that the Revenue has invoked extended period of limitation alleging suppression for which there is....
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....Ld. Advocates. The Ld. Representatives should help the Bench in issuing speaking order at the earliest, after the conclusion of hearing and, in this regard, they should draw attention of the Bench to the specific observations/ratio in the decisions relied upon. In this regard, the observations of the Hon'ble Apex court in Rashmi Metaliks Ltd. & Anr Vs Kolkata Metrop. Dev. Auth. & Ors [(2013) 10 SCC 95], has been captured by Hon'ble Gujarat High court in the case of JAY KRISHNA GROUP THROUGH BHARVAD NAVGHAN CHHAGANBHAI - Vs - INCOME TAX OFFICER WARD-1 [R/SPECIAL CIVIL APPLICATION NO. 15739 of 2021 WITH R/SPECIAL CIVIL APPLICATION No. 5883 of 2022 dated 17/08/2022] wherein, the High court has observed as under: ' ----- ----- 14. .....It is trite law that while relying upon case - laws in support of their submissions, learned advocates need not file or rely upon repetitive judgments on the same issue by furnishing same to the Court so as to inflate the records. Any judgment which has been relied upon has to be independent, separate and distinct from one which has already relied upon for its application to the facts of the case concerned. By furnishing or submitting multiple judg....
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.... profit] is only space [in the course of business] to the license holder, along with access to the premises to the staff and workers of such license holder for which, user charges and a license fee are collected from the license holder; such activities are not performed by Government but by IRCTC, they are not performed under the provisions of law or while enforcing any law or performing any statutory obligation and hence, the collection of the fees is not a compulsory Levy. Further, nowhere it is proved with documentary evidence that the fees so collected are deposited into the Government Treasury, it cannot also be said to be a mandatory statutory obligation of the Government Department or PSU constituted under a particular statute, to provide shop on platforms on rent. The said projects therefore would fall under the category of commercial projects where, as per the Agreement, the potentiality to earn profits from business are higher. Moreover, such Food Plaza are not in the nature of a Joint Venture where IRCTC is also responsible for any loss. It is not the case of the Appellant that the said space is used for residential purposes and for the purposes of providing accommodatio....
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....hat they could choose to register and remit Service Tax in respect of some of the chosen services itself prima facie indicates that they are aware of their position as a business entity in the market and that they are not rendering any 'sovereign' function. Sovereignty cannot be taken so lightly to choose between the services and hence, their claims about rendering services akin to sovereign functions is clearly misleading, misconceived and we reject this claim at the threshold. 11.2 This apart, the appellant is not a creature of legislation but it is only 'Miniratna' Public Corporation; its activities are not inalienable and could be performed by a private body. 12. We have very carefully perused the MOU between the Indian Railways and Appellant and also the Agreement between the Appellant and the License Holder; from these, we find that it is a pure Commercial Agreement; the only difference is in terming of the rental as fees/charges. Usually, a Commercial Agreement would charge rent for the same service but the Appellant for unknown reasons has termed it as 'user charges' and 'license fee', that too a profit. This being a commercial venture, though payment is mandatory, the re....