TaxTMI 
TaxTMI 
2026 (2) TMI 236
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....te OIA date Demand of Service Tax (Rs) Penalty (Rs) 1. ST/55340/2013 Oct 2006 to Sept 2011 11.04.2012 19.10.2012 - 1,70,91,927 1,70,91,927 u/s 78 & 10,000 u/s 77 2. ST/61690/2018 to ST/61693/2018 Oct 2011 to Mar 2012 18.04.2013 - 26.03.2018 16,19,120 10,000 u/s 77 3. Apr 2012 to Mar 2013 15.10.2013 40,39,300 10,000 u/s 77 4. Apr 2013 to Sept 2013 17.04.2015 16,86,724 10,000 u/s 77 5. Oct 2013 to Mar 2014 16.10.2015 16,46,074 10,000 u/s 77 6. ST/61897/2018 Apr 2014 to Mar 2015 05.04.2016 - 07.06.2018 33,41,199 3,34,120 u/s 76 Since, the issue involved in all these six appeals is identical, therefore, all appeals are taken up together for the purpose of discussion and decisions. 2. Briefly stated facts of the case are that the Appellant is engaged in provided the services under 'Business Support Service'. It was gathered that the Appellant was engaged in collecting adda-fees from the users of bus-terminal at Amritsar from transporters for usi....
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.... are provided by the Appellant to the bus operators and not to Authority; further, it has been held that the services provided by the Appellant are in furtherance of the business of bus operators and other users of the bus-terminal and therefore, the said services are classified under the category of 'Business Support Services'. 4.2 The learned Counsel further submits that the Appellant is not rendering support services to bus operators and no service tax is payable by the Appellant under 'Business Support Services'. He also submits that the adda-fees are notified by the State of Punjab based on the duration for which buses and other vehicles are parked in open-land. He also submits that the service tax is demanded on adda-fees mentioned in Schedule-II and no service tax is demanded on charges collected by the Appellant in Schedule-III. 4.3 The learned Counsel further submits that service tax has wrongly been demanded without considering the facts of the present case and the terms of concession agreement. He also refers to the various clauses of the agreement entered into between the Appellant and the Authority under Punjab Infrastructure (Development & Regulation) Act,....
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....ndoubtedly PIDB. He also submits that in fact, there was never a privity of contract between the Appellant and the bus operators to provide any services; the agreement was signed between the Appellant and the Authority whereby the Appellant agreed to construct, develop, design, finance the project and operate and maintain during concession period, and the Authority in consideration of the same permitted the Appellant to levy and collect the adda-fees from bus operators. 4.8 The learned Counsel also submits that the service tax is a contract based levy; the service provider is engaged contractually by the service recipient to receive services; the provision and use of service, thus, has to be seen in terms of the agreement between the parties. In this regard, he relies on the following decisions: • Commr of CGST, Chennai vs. Wunderbar Films Pvt Ltd - 2024 (3) TMI 17 - Madras High Court • Mohit Minerals Pvt Ltd vs. UOI - 2020 (33) GSTL 321 (Guj.) 4.9 The learned Counsel further submits that it is an admitted fact that the Appellant had contract with State of Punjab and liability to service tax has to be determined based on the contract with State....
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....el also submits that there is no relation/connection whatsoever between the Appellant and the bus operators in so far as the provisions of services are concerned in as much as there is no privity between the Appellant and the bus operators to provide any services; adda-fees and other charges are collected by virtue of the concession agreement. 4.15 The learned Counsel relies on the decision of this Tribunal in the case of Chandigarh Transport Corporation vs. CCE, Chandigarh-I - 2023 (7) TMI 363 - CESTAT Chandigarh, wherein on identical issue, demand of service tax on adda-fee was set aside. He also places reliance on the following decisions: • IN RE: Kadamba Transport Corporation Ltd - 2010 (19) STR 617 (Commr. Appl.) • IDAA Infrastructure Pvt Ltd vs. CST, Mumbai - 2014 (34) STR 87 (Tri. Mumbai) • PNC Infratech Ltd vs. CCE, Ludhiana - 2023 (7) TMI 258 - CESTAT Chandigarh • B.G. Shirke Construction Technology Pvt Ltd vs. CCE, Pune-III - 2014 (33) STR 77 (Tri. Mumbai) 5. On the other hand, the learned Authorized Representative for the department reiterates the findings of the impugned orders and submits that ....
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.... the category of 'business support services'. 6.1 The learned Counsel tries to distinguish the facts of the case of Prem Kumar Maini (supra) with the present case. He submits that in the case of Prem Kumar Maini (supra), the assessee Mr. Maini was allowed to operate and maintain the existing bus-terminal and collect the adda-fee; Mr. Maini was appointed mainly for collecting adda-fee; Mr. Maini was handed over an existing bus-terminal for the limited purpose of its operation and maintenance, and unlike the present case's Appellant, Mr. Maini did not invest any money to build a completely new terminal at his own costs on 'build operate and transfer'. Whereas, in the present case, the Appellant had built a completely new bus-terminal at its own costs and was required to handover and transfer the assets to the State of Punjab on the expiry of eleven years; instead of paying the costs of construction of new bus-terminal, the Appellant was allowed to collect adda-fees mentioned in Schedule-II and other charges mentioned in ScheduleIII; the concession agreement was governed by PIDR Act and addafee was fixed by the State of Punjab. 6.2 The learned Counsel further submits that the ab....
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....rce. These services include transaction processing, routine administration or accountancy, customer relationship management and tele-marketing. There are also business entities which provide infrastructural support such as providing instant offices along with secretarial assistance known as "Business Centre Services". It is proposed to tax all such outsourced services. If these services are provided on behalf of a person, they are already taxed under Business Auxiliary Service. Definition of support services of business or commerce gives indicative list of outsourced services." Further, vide Circular No. 334/3/2011-TRU dated 28.02.2011, the Board has clarified as under: "5. Business Support Service [section 65 (105) (zzzq)]: 5.1 The scope of the service is being expanded to include operational or administrative assistance of any kind. The scope will cover all support activities for others on a contract or fee, that are ongoing business support functions that businesses and organizations commonly do for themselves but sometimes find it economical or otherwise worthwhile to outsource." 8. We find that in the present case, the Appellant had entered into an....
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....he fees to be collected from the bus operators and the same was at the sole discretion as the same is evident from clause 2.1 of the agreement. 10. We also find that the demand in the present case is only on adda-fees specified in Schedule-II under the head of taxable business support service, even though the department has stated that the service tax demand is on other charges specified in Schedule-III also, but the computation of demand in the SCNs is restricted to adda-fees only. 11. Further, we find that the entire case of the department is that the Appellant provided support services to bus operators, and without providing the facility for entry & exit and embarking/disembarking of passengers, the business of the bus operators will definitely suffer and that the services are being provided by the Appellant to the bus operators in furtherance of their business/smooth conduct of the passengers as held at para 4.7 of the impugned OIO dated 19.10.2012. The said finding of the learned Commissioner clearly shows that the alleged services provided by the Appellant do not come under the 'business support services' because the business support services, as per the definitio....
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....nds on the contract between the supplier and the recipient. Thus, where the tax is sought to be levied and collected by a person other than the supplier or the supplier of service, distortions and contingency which the Act does not covers, are bound to occur." 13. Further, we find that it is an admitted fact that the Appellant had a contract with State of Punjab and liability to service tax has to be determined based on the contract with State of Punjab; there exists no contract with the bus operators for providing any services; further, at the time of entering into contract with State of Punjab, the Appellant could not have agreed to provide support services to unknown bus operators; further, the entire bus-terminal constructed by the Appellant could not have been constructed to support the business of the bus operators, in fact, bus-terminals are created as a public utility service and not as support services for bus operators and hence, the service tax is not leviable under the business support services. 14. Further, we find that adda-fees are collected by the Appellant as per the agreement with the PIDB which authorizes the Appellant to collect the adda-fees in lieu of th....