TaxTMI 
TaxTMI 
2025 (11) TMI 947
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....(ii) I hereby impose penalty of Rs. 31,54,827.00 (Rupees Thirty One Lakhs Fifty Four Thousand Eight Hundred Twenty Seven only) upon the Noticee under Section 76 of the Act, read with Section 174 of the CGST Act, 2017 as discussed above. (iii) I do not impose any penalty under Section 77 (2) of the Act upon the Noticee, as discussed above. (iv) I also impose Late Fee amounting to Rs. 60,000/- (Rupees Sixty Thousand only) for delayed filing of ST-3 Returns for the Financial Year 2016-17 and 2017-18 [upto June 2017] under the provisions of Section 70 of the Act read with Rule 7C of the Rules and read with Section 174 of the CGST Act, 2017. 2.1 Appellant is engaged in providing the taxable service under the category of "Works Contract Services" and registered with Service Tax Department vide Registration Number. AACCG7829ESD001 2.2 They were providing Work Contract Service to M/s Rajya Krishi Utpadan Mandi Parishad, Uttar Pradesh (Mandi Parishad) and claiming exemption from payment of Service Tax in the ST-3 Returns filed by them under various notifications relevant to the said periods. On scrutiny of ST-3 returns. it was observed that the Noticee had provided t....
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....e. On perusal of Form 26-AS for the financial year 2016-17 and Form 26AS for the Financial Year 2017-18 (upto June, 2017). 2.7 From the scrutiny of the above it was observed that Appellant had received the amounts as detailed in the table below: Period Mandi Parishad KDA Total 2016-17 34,34,69,198 14,76,14,049 49,10,83,247 2017-18 (upto June 17) 0 2,76,40,606 2,76,40,606 Total 34,34,69,198 17,52,54,655 51,87,23,853 2.8 Appellant had claimed exemption in respect of the amount as received above under Sl. No. 12(a), 12(c), 12( d), 12(e), 13(a), 25(a), 12A(a) & (b) of Notification No. 25/2012-S dated 20.06.2012, as amended. The said exemptions were prima facie did not appear to be admissible to them. Service Tax short paid in respect of these work contract services provided by the Appellant is as per the table below: Period Gross Receipts Taxable value Service Tax @ (%) Service Tax Payable 1 2 3=40% of 2 4 5= 3 * 4/100 2016-17 490976079 196390432 15 29458565 2017-18 (upto June 17) 2764....
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....ax on the gross amount received by them in lieu of providing these taxable services. iii. Section 70 of the Act read with Rule 7 of the Rules in as much as they did not themselves assess the tax appropriately on the services provided by them and furnish the half yearly returns in Form ST-3 properly to the department on due date. iv. Section 68(2) of the Act read with Notification No.30/2012-ST dated 20.06.2012, as amended for nonpayment of Service Tax for the services received by them under reverse charge mechanism. 2.12 Thus the amount of the service tax (inclusive of cesses) was liable to be recovered from them along with the interest as per Section 75 of Finance Act, 1994. Appellant was also liable for penalty under Section 76 and 77 (2) ibid, for various contraventions made as detailed above. 2.13 A Show Cause Notice dated 04.04.2019 was issued to them asking them to show cause as to why: (i) An amount of Rs.51,86,16,685/-, should not be treated as the gross amount of taxable services of Work Contract provided by them during the Financial Year 2016-17 & 2017-18 (upto June, 2017) and accordingly as to why Service Tax (including applicable Cesses)....
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....tification No. 25/2012-ST dated 20.06.2012? (ii) Whether the exemption from payment of Services received by them under reverse charge mechanism. (iii) Issue relating to demand of interest and penal action against Noticee. Taxability of Construction Work for Mandi Parishad:- 26. The noticee pleaded that in respect of construction work undertaken by them for Mandi Parishad and KDA during 2016-17 and 2017-18 (Up to June, 2017), same is exempted service under clause 12, 13 & 25 of Notification No. 25/2012-ST dated 20.06.2012 because the Mandi Parishad is a Governmental Authority which came into existence by Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 (25 of 1964) of the Uttar Pradesh State Government and the construction work undertaken by them is original work for use other than commerce, industry, or any other business or profession. I find that under the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964, the State Government declare any area as Market Area and for every Market Area there shall be a Committee to be called the Mandi samiti. On examination of the statutory structure of the Krishi Utpadan Mandi Samiti, it has been found that M....
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....h contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance renovation. alteration of any movable or immovable property or for carrying out any other similar ac ivity or a part thereof in relation to such property." 29 And whereas, Rule 2A of the Valuation Rules w.e.f. 01.07.2012 reads as under: "2A. Determination of value of service portion in the execution of a works contract, Subject to the provisions of section 67, the value of service portion in the execution of a works contract, referred to in clause (h) of section 66E of the Act, shall be determined in the following manner, namely :- (iii) Value of service portion in the execution of a works contract shall be equivalent to the gross amount charged for the works contract less the value of property in goods transferred in the execution of the said works contract. Explanation.- For the purpose of this clause,- (e) gross amount charged for-the works contract shall not include value added tax or sales tax, as the case may be, paid or payable, if any, on transfer of property in goods invol....
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....pes of additions and alterations to abandoned or damaged structures on land that are required to make them workable; iii. erection, commissioning or installation of plant, machinery or equipment or structures, whether pre-fabricated or otherwise; (h) "total amount" means the sum total of the gross amount charged for the works contract and the fair market value of all goods and services supplied in or in relation to the execution of the works contract, whether or not supplied under the same contract or any other contract, after deducting- (i) the amount charged for such goods or services, if any; and (ii) the value added tax or sales tax, if any, levied thereon; Provided that the fair market value of goods and services supplied may be determined in accordance with the generally accepted accounting principles. Explanation 2,- For the removal of doubts, it is clarified that the provider of taxable service shall not take CENVAT credit of duties or cess paid on any inputs, used in or in relation to the said works contract, under the provisions of CENVAT Credit Rules, 2004". 30(a) And I also find that as per the entry numbers....
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....es Divison-2, Kesli Bazar, Sagar(MP), Construction of 100 Bedded Maternity wing at S.N. Medical College, Agra under CDS, Construction of Government Forest Training School, Amarkantak, AnoopPur (MP), Boundary fencing for MTRC towers & CERs in BRE-MGS section under North Central Railway and construction of road and other related work at Sarswati Hitech City at Allahabad under UPSIDC are covered under these and are thereby exempted from the levy of Service Tax. 30 (b) However, the other works contract executed by the Noticee in respect of Mandi Parishad and KDA appears liable for payment of Service Tax, as the same are for construction of Shops, Auction Platform, Parking, Canteen, Godown etc. and construction of multilevel car parking and renovation of Naveen Market for KDA, which are not only commercial in nature but also "not provided to any Government, local authority or governmental authority. Though the Noticee has also constructed some toilets, water supply, sewage line, STP, rain water harvesting, water storage tank, but these are incidental or ancillary to main service for construction of Mandi Sthal (Market Area) for said Mandi Parishad. Thus, I find that the Service....
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....rishad, Jhansi and Rs. 1,40,04,770/- from Raiya Krishi utpadan Mandi Parishad, Orai (UP) Rs. 18,64,08,431/- from Dy. Director Construction, Lucknow (UP) and Rs. 14,76,14,049/- from KDA, Kanpur during 2016-17 and received an amount of Rs. 2,76,40,606/- during Financial Year 2017-18 (upto June, 2017) from KDA, Kanpur and resultant Service Tax liability is calculated as under: TABLE-D (Amount in Rs) S N o Financi al Year Gross Amount received by Noticee from Mandi Parishad and KDA (As per Form 26AS) Taxable Value as per Rule 2A(II)(A) of Valuation Rules, 2006 i.e. 40% of gross amt. In Col.3 Rate of Service Tax (lnclusi ve of cesses) Amount of Service Tax payable Service Tax Swachh Bharat Cess Krishi Kalyan Cess Total 1 2 3 4 5 6 7 8 9 1 2016-17 49,09,76,079 19,6390,432 15.00% 2,74,74,660 9,81,952 9,81,952 2,94,58,565 2 2017- 18 (upto June 2018) 2,76,40,606 1,10,56,242 15.00% 15,47,874 55,281 55,281 16,58,436 Total 51,86,16,685 20,74,46,674 2,90,42,534 10,37,2....
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....ed to a municipality under article 243W of the Constitution.' Thus to be a Governmental Authority, there are two conditions i.e. (a) Such body is set up by an Act of Parliament or a State Legislature or established by Government; AND (b) Such body to be formed with 90% or more equity participation or control by Government to carry out any function entrusted to a Municipality under Article 243W of the Constitution. 31.2 As a matter of fact, these Mandi Parishad are formed under State Legislative Act i.e. Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964 but not for carrying out any municipality functions which are carried under Article 243W of the Constitution. Further, it is not established by Noticee that 90% of equity or control is by Government. Rather it is run more on commercial basis, having a perpetual succession, collects rent from various shops located in the Market Area; collects fees from traders participating in the activities. No doubt it provides basic facilities like shelter, roads, sanitation, water etc. but does charge fee etc. 31.3 I observe that some internal roads, to be used for a selected group of persons not a....
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....in lieu of providing service under the category of Work Contract during the financial year 2016-17 and 2017-18 (upto June, 2017), which is liable to be confirmed against Noticee under the provisions of Section 73(1) of the Act along with interest under Section 75 of the Act. 34. Further, I find from the perusal of Balance Sheet of Noticee for F.Y. 2016-17 (RUD-6) and 2017-18 [Ledger A/c upto June, 2017] (RUD-7), that they have made expenditures towards receiving services of Goods Transport Agency (shown under the Head of 'Freight & Cartage'), Security Agency Service and Legal Service provided by a firm of advocates or an individual advocate. As the Noticee is a Body Corporate, therefore, they are also liable to pay Service Tax on such services under Reverse Charge Mechanism ([RCM) under the provisions of Rule 2(1) (d) of the Service Tax Rules, 1994 (in short 'the Rules') read with Notification No.30/2012-ST dated 20,06.2012, as amended. As per provisions of Notification 30/2012-ST dated 20.06.2012, percentage of Service Tax to be paid by the service recipients and service providers in respect of these services, as applicable during 2015-16, is as under:- ....
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....503 15080 3 Legal Service 2016-17 57500 0 57500 15% 8050 288 288 8625 2017-18 (upto June 17) 0 0 15% 0 0 0 0 Total 5700801 2825696 2875105 402515 14376 14376 431266 From the above Table-B, I find that Noticee has not paid Service Tax (inclusive of applicable Cesses) amounting to Rs 4,31,266/- (Rupees Four Lakh Thirty One Thousand Two Hundred Sixty Six only) for the services received by them under reverse charge mechanism and the same is demandable from Noticee under Section 73(1) of the Act along with interest under Section 75 of the Act. 36. Further, I find that, as per provisions of Section 70 of the Act read with Rule 7C of the Rules, where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government Late Fee, as prescribed in the said Rule 7C of the Rules. On perusal of ST-3 Return filed by the Noticee, it has been noticed that they have late filed their ST-3 Returns, the details are as und....
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....the service tax in respect of services provided by the Appellant to Mandi Parishad as per the impugned order is case of recurring demand and the cases for the past period were adjudicated as per the order in original referred in para 2.2 above. The issues raised while confirming these demand have been adjudicated by the CESTAT vide order referred below hold that the demand made in respect of the services provided to Mandi Parishad is not sustainable and was set aside. Order in Original Service Tax Appeal Final Order Number Date Number Date AGA-EXCUS-000-COM0047-15-16 31.03.2016 ST/70671/2016 70182/2021 05.08.2021 AGA- EXCUS-000-COM0026-16-17 03.11.2016 ST/70073/2017 70196-70197 / 2021 19.08.2021 21- 22/ST/JC/2018 02.01.2019 ST/70729/2019 4.4 We find that the tribunal has considered the issue for period post introduction of negative list regime of taxation i.e. 01.07.2012 in the Final Order dated 19.08.2021 and for allowing the appeals have observed as follows: "12. Having considered the rival contentions, We find that admittedly the Principal-Mandi Samiti is the statuar....
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.... area of 60 square metres per house in a housing project approved by competent authority empowered under the 'Scheme of Affordable Housing in Partnership' framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India; (d) Post- harvest storage infrastructure for agricultural produce including a cold storages for such purposes; or 13. From above citation we find that undisputedly the Appellant have rendered construction service to the Mandi Samiti, which is a statuary authority. We, further find that the services provided to Mandi Samiti for construction services in the market yard are not commercial in nature as held by a coordinated Bench of this Tribunal in KRISHI UPAJ MANDI SAMITI Vs. Commissioner of C. Ex & S.T., JAIPUR, 2017(4)G.S.T.L, 346 (Tri.-Del)). Wherein Para 10 & 11 it is held herein with the introduction of Negative List Regime of Taxation w.e.f. from 1st July, 2012, the Mandi Parishad is excluded from tax liability. Under Section 66 D (d) provides exemptions for services relating to agriculture or agricultural produces by way of renting or leasing of agro machinery, shorting, grading, cooling or bulk packaging, loading, unloadi....
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.... in clause 2(s) is entitled for exemption under Clause-12. 12. The Krishi Utpadan Mandi Samiti is established by an Act of the State Legislature to provide for the regulation of sale and purchase of agricultural produce and for the establishment, superintendence and control of markets therefor in the State of Uttar Pradesh. Section 16 of U.P. Krishi Utpadan Mandi Adhiniyam has been placed before us to demonstrate that none of the functions and duties of the Committee are commercial or business in nature. Amongst its various functions, as mentioned in sub-Section (2) of Section 16, it is required to standardise specified agricultural produce and regulate trade charges, market practices and customary methods of sale and purchase of specified agricultural produce; to provide suitable amenities in the market yards; construct, repair and maintain link roads, pathways and market lanes and byelanes in the market area. It is to ensure fair dealings between the producers and the purchasers of specified agricultural produce. While discharging its functions, the Committee requires construction of shops, market yards, warehouses, for packaging, storage, cooling or bulk packaging etc i....
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....ssue has been brought to its logical end with the decision of the Apex Court in Krishi Upaj Mandi Samiti v. Commissioner of C.Ex. & S.T., Alwar [2022 (58) G.S.T.L. 129]/[2022] 135 taxmann.com 354 (SC). 18. It is evident from the Mandi Samiti Act that the Mandi Samiti is a Corporate body and all its functions and duties are directed towards regulating the sale and purchase of the agricultural produce. The Mandi Samiti is required to establish markets to exercise superintendence and control over the sale and purchase of the agricultural produce. The construction activities inside the Mandi area cannot be termed as business activities. 19. In the similar facts and circumstances of this Court in Central Excise Appeal No. 06 of 2022 had taken a view that the provisions of Mega Exemption Notification in light of the functions and duties of the Krishi Utpadan Mandi Samiti would be applicable in case of "Work Contract Services" provided by the Contractor to Krishi Utpadan Mandi Samiti and the Contractor would be entitled to exemption from levy of service tax in view of the exemption notification no. 12/2012-ST. The argument of the learned counsel for the Appellant revenue....
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.... demands raised after 1-7-2012 for periods prior to that date. Regarding invoking old provisions of Act for periods post 1-7-2012, we note that it is well settled legal principle that mention of incorrect section/rule will not make the proceedings invalid. The scope of demand along with applicable facts are brought out in the notice. Not mentioning the changing Section by itself will not be fatal to the proceedings. 7. The Appellants' status as an authority created under a State enactment is not in dispute. Their overall functions and the activities were regulated by the said enactment and the rules made thereunder is also an admitted fact. The Appellant strongly pleaded that they are allotting land/shops to various traders in furtherance of their statutory functions for promoting welfare of agriculturists. Reliance was placed by the Appellant on the clarification issued by the Board vide Circular dated 18-12-2006. The said circular is reproduced below :- Circular No. 89/7/2006, dated 18-12-2006 : "A number of sovereign /public authorities (i.e., an agency constituted/set up by Government) perform certain functions/duties, which are statutory in nature. T....
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....uing licence to wholesale trader cum-commission agent, any other buyer of agriculture produce, etc. As statutory body the Appellant provide basic facility in the market area out of the market fee collected from licensee, mainly to facilitate the farmers, purchasers and others. This activity of the Appellant is not taxable as clarified under C.B.E. & C. Circular No. 89/7/2006-S.T., dated 18-12-2006 read with C.B.E. & C. Circular No. 157/8/2012-S.T., dated 27-4-2012. (ii) The Appellant have been providing another kind of service, which is not in the nature of Statutory activity and the same is undertaken for a consideration like renting of shops, canteen, dharamkanta in the krishi upaj mandi samiti market area. I find that this is liable to Service Tax as amply clarified in Para 3 of C.B.E. & C. Circular No. 89/7/2006-S.T., dated 18-12-2006 and reiterated under para 6 of C.B.E. & C. Circular No. 157/8/2012S.T., dated 27-4-2012. 9. It is relevant to note that here that the allotment of land/shops to the traders is not in terms of the Rajasthan Agricultural Produce Markets Act, 1961 or the rules made thereunder. In fact, in the written submissions, made by the ld. Cou....
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....sport of goods or passengers; or (iv) any service other than services covered under clauses (i) to (iii) above, provided to business entities; (b) services by the Reserve Bank of India; (c) services by a foreign diplomatic mission located in India; (d) services relating to agriculture or agricultural produce by way of - (i) agricultural operations directly related to production of any agricultural produce including cultivation, harvesting, threshing, plant protection or testing; (ii) supply of farm labour; (iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging and such like operations which do not alter the essential characteristics of agricultural produce but make it only marketable for the primary market; (iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its use; (v) loading, unloading, packing, storage or warehousing of agricultural produce; (vi) agricultural extension services; (vii) s....
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.... 161 and 162 of the Budget Speech of the Hon'ble Finance Minister while introducing Budget 2012-2013. The same is extracted as below :- 161. The important inclusions in the negative list comprise all services provided by the Government or local authorities, except a few specified services where they compete with private sector. The list also includes pre-school and school education, recognized education at higher levels and approved vocational education, renting of residential dwellings, entertainment and amusement services and a large part of public transportation including inland waterways, urban railways and metered cabs. 162. Agriculture and animal husbandry enjoy a very important place in our lives. Practically all services required for cultivation, breeding, production, processing or marketing up to the stage the produce is sold in the primary markets are covered by the list. 13. It is mentioned that practically all services required for cultivation, breeding product, processing or marketing up to the stage the produce is sold in the primary markets are covered by the list. In the present case, we note that we are dealing with the shops and land giv....
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.... the vehicles; the Directorate of Boilers inspects and issues certificate for boilers; or Explosive Department inspects and issues certificate for petroleum storage tank, LPG/CNG tank in terms of provisions of the relevant lows. Fee as prescribed is charged and the same is ultimately deposited into the Government Treasury. A doubt has arisen whether such activities provided by a sovereign/public authority required to be provided under a statute can be considered as 'provision of service' for the purpose of levy of service tax. The issue has been examined. The Board is of the view that the 2. activities performed by the sovereign/public authorities under the provision of law are in the nature of statutory obligations which are to be fulfilled in accordance with law. The fee collected by them for performing such activities is in the nature of compulsory levy as per the provision of the relevant statute, and it is deposited into the Government treasury. Such activity is purely in public interest and it is undertaken as mandatory and statutory function. These are not in the nature of service to any particular individual for any consideration. Therefore, such an activi....
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....atutory provisions. 8.3 As per the law laid down by this Court in a catena of decisions, in a taxing statute, it is the plain language of the provision that has to be preferred, where language is plain and is capable of determining a defined meaning. Strict interpretation of the provision is to be accorded to each case on hand. Purposive interpretation can be given only when there is an ambiguity in the statutory provision or it results in absurdity, which is so not found in the present case. 8.4 Now, so far as the submission on behalf of the respondent that in the event of ambiguity in a provision in a fiscal statute, a construction favourable to the assessee should be adopted is concerned, the said principle shall not be applicable to construction of an exemption notification, when it is clear and not ambiguous. Thus, it will be for the assessee to show that he comes within the purview of the notification. Eligibility clause, it is well settled, in relation to exemption notification must be given effect to as per the language and not to expand its scope deviating from its language. Thus, there is a vast difference and distinction between a charging provision in ....
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.... "45. fund. - All money received by the Market Committee shall be credited to the fund called the Market Committee fund. Except where Government on application by the Market Committee or otherwise shall direct, all money paid into the Market Committee fund shall be credited at least once a week in full into Government treasury or sub-treasury, or a bank duly approved for this purpose by the Director. All balance from the fund shall be kept in such treasury or subtreasury or bank and it shall not be withdrawn upon except in accordance with these rules." 10.1 Now, so far as the submission on behalf of the Appellants relying upon Rule 45 of the Rules, 1963 that the fees, which is collected shall be deposited with the Government Treasury and therefore also the Market Committees are exempted from payment of service tax is concerned, it is to be noted that on fair reading of Rule 45, the amount of fee so collected on such activities - rent/lease shall not go to the Government. Rule 45 provides how the money received by the Market Committees shall be invested and/or deposited. It provides that all money received by the Market Committee shall be credited to the fund called t....
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....rt has held that "activity of renting of immovable property" by the Krishi Upaj Mandi Samiti is subject to service tax prior to 01.07.2007. However with effect from this date, by virtue of Section 66D, the activities undertaken by them have been put under negative list hence no service tax is leviable. This decision has been followed by Hon'ble Supreme Court and High Court across country, making distinction between the statutory functions and non statutory functions to determine the leviability of service tax on these statutory bodies. Some of these decision are listed below: • Agriculture Produce Marketing Committee Gazipur [2023 (2) CEN 293 (SC)] • Gujarat Industrial Development Corporation [2023 (5) CEN 171 (SC)] • Tata Power Delhi Distribution Ltd. [2024 (17) CEN 155 (DEL)] 4.9 From the above decisions it is quite evident that the certain statutory activities undertaken by the statutory body have been held to be exempted from payment of service. The decision of Delhi High Court in the case of Tata Power Delhi Distribution Ltd., is the case where liability to pay service tax on services provided to MCD has been upheld. The observations m....
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.... Delhi Distribution Ltd. are service providers under Management, maintenance or repair service: in respect of maintenance of Street lights in the area of Municipal Corporation (MCD) of Delhi. The following are the exemption provisions which may be applied:- S. No. Notification Provision of service Tax Opinion of TRU-II 1 Notification No. 24/2009 dated 27-7- 2009 Exempts the taxable service, referred to in sub-clause (zzg) of clause (105) of section 65 of the Finance Act, 1994, provided to any person by any other person in relation to management, maintenance or repair of roads from the whole of the service tax leviable thereon under section 66 of the said Finance Act. Not applicable as service by way of maintenance of street lights provided to a local authority is not a service in relation to management maintenance or repair of roads. 2 Notification No. 32/2010 dated 22-6- 2010 Exempts the taxable service provided to any person, by a distribution licensee, a distribution franchisee, or any other person by whatever name called authorized to distribute power under the Electricity Act ....
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.... Excise and Customs, as to whether the exemption from service tax was available, vis-à-vis maintenance of street lights. The clarification sought, however, did not reap beneficial results for respondent no. 1/MCD. The same is evident upon a perusal of the following extract taken from the affidavit filed by respondent no. 1/MCD: " ** ** ** 2. That the present affidavit is being filed in pursuance of the order(s) dated 19-8-2011 and 17-1-2012 passed by this Hon'ble Court. It is submitted that as stated in para No. 44 of, the counter affidavit, the MCD had not applied to the Central Govt. after the rejection order. However, it is submitted that vide letter No. 9095/CA-CUM-FA/2012 dated 16-1-2012, which came to the knowledge of the deponent afterwards than 17-1-2012, through CA-Cum-FA, MCD, the Respondent side gave the said letter/application for exemption of service tax on maintenance of street lights with the Director (Service Tax), Central Board of Excise and Customs, North Block, New Delhi. However, no response to the same has been received till date by the said office of MCD. ** ** **" 11. Mr ....
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.... accepted. 13. Therefore, insofar as the first issue, as noted in paragraph 1 above, is concerned, it has to be decided in favour of the petitioners, which is that, during the relevant period, there was no exemption available from the payment of service tax, concerning the maintenance of street lights. 14. Insofar as the second issue is concerned, it can be decided based on an admitted fact, which is, that the petitioners have paid service tax, during the relevant period. The logical sequitur would be that the petitioners would have to be reimbursed the service tax that they have paid, since the recipient would have to bear the ultimate burden of the payments in that behalf." 4.10 Thus in view of the decisions as above, the services provided to the statutory authorities or government will not be exempt from payment of service tax, till it can be shown that the services provide are strictly falling within the purview of exemption notification. Appellant has in the present case in respect of the "work contract services" provided by them claimed exemption under various S No. of the exemption Notification No 25/2012-ST. These clause have been dealt by the impugned ....
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..... Similarly under Clause 999.01 with regard to the sovereign/public duties/functions, it has been clarified that activities assigned to and performed by the sovereign/public authorities under the provisions of any law are statutory duties. The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy and are deposited into the Government account. Such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. Therefore, such activities assigned to be performed by a sovereign/public authority under the provisions of any law, do not constitute taxable services. Any amount/fee collected in such cases are not to be treated as consideration for the purposes of levy of Service Tax. 33. However, if a sovereign/public authority provides a services, which is not in the nature of an statutory activity and the same is undertaken for a consideration (not a statutory fee), then in such cases, Service Tax would be leviable as long as the activity undertaken falls within the scope of a taxable service ....
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....the services rendered by them are not exigible to service tax. 25. Learned counsel for the Appellant submits that to the extent the Appellant had received amount through goods transport agencies it has already paid service tax as a part of settlement under VCES 2013. As far as the individual truck owners are concerned, the services rendered by the Appellant are not exigible to service tax because they are not goods transport agency. 26. In view of the above, the demand of service tax under reverse charge mechanism on roads transport agency services on the services rendered by the individual truck owners also cannot be sustained. Since the demand of service tax cannot be sustained, the demand of interest and penalty also need to be set aside." 4.15 We are in total agreement with above decision of the Delhi Bench. However we find that Appellant has not be able to show as what was the extent of services received by them from individual truck owners. On perusal of Ledger Account of the Appellant for the period in dispute it is evident that Appellant had been receiving services from Good Transport Agencies such M/s Tirupati Agencies, M/s Roop & Sons, M/s Ajay Enterp....