Decided on July 01,2015

Ideal Road Builders P. Ltd. Appellant
Commissioner Of Service Tax, Mumbai Respondents


M.V.RAVINDRAN, MEMBER (J) - (1.)THIS appeal is directed against Order -in -Original No. 46/BR -42/ST/TH -1/2009 dated 19.11.2009.
(2.)The relevant facts that arise for consideration are the officers of DGCEI collected intelligence that the appellant were providing various services to National Highway Authorities of India (NHAI) in relation to collection of toll which was chargeable to service tax under Business Auxiliary Service. After investigation, recording of the statement of General Manager, authorities came to a conclusion that the 3 toll plaza which were managed and operated by the appellant were in respect of the operation expenses borne by them and they were collecting toll on behalf of NHAI and were getting payments from NHAI and they were not registered with the service tax authorities. Coming to such a conclusion, a show -cause notice dated 10.04.2007 was issued for demand of service tax liability for the period 01.07.2003 to 31.01.2007 under the head Business Auxiliary Service as also for demanding interest and for imposition of penalty. Appellant contested the show -cause notice on merits inter alia pleading that NHAI is Government of India and are providing sovereign service through them. In any case, the service or collection of toll and repatriating the same to NHAI will not be covered under Business Auxiliary Service. 2.1 A plea on limitation was also taken before the Adjudicating Authority. The Adjudicating Authority after following the due process of law did not agree with the contention raised and confirmed the demands raised along with interest and also imposed penalties.
(3.)LD . CA appearing on behalf of the appellant would take us through the contracts/agreements signed by the appellant with NHAI. He would also take us through the entire case records and submit that NHAI is not in the activity of development, maintenance and management of National highway, which is a statutory function/body towards public welfare and not a business activity. Hence service, if any, provided by the appellant to NHAI cannot be said to be auxiliary to business. According to him appellant activity of toll collection is not liable for service tax under the category of Business Auxiliary Service has been settled by the Tribunal in the following cases:
"* CST v. Intertoll ICS CE Cons O& M.P. Ltd. : 2013 (31) STR 477 (Tri -Del)

* PNC Construction Co. Ltd. v. CCE, (2012) 28 182 (New Delhi -CESTAT)

* Patel Infrastructure P. Ltd. v. CCE : 2014 (33) STR 701 (Tri -Ahmd)."

3.1. It is his alternative argument that appellant's activity as such does not come under any clause of Business Auxiliary Service for the purpose of which he relies upon decision of the Tribunal in similar set of facts in the case of Intertoll India Consultants P. Ltd. v. CCE : 2011 (24) STR 611 (Tri -Del). It is also his submission that the Toll Right Contract, which have been awarded to the appellant, there is no service provided to NHAI as toll is collected on appellant's own account for conducting its own business of toll collection; appellants are not agent/representative of NHAI for collection of toll; and under Toll Right Contract, by Rule 9 of National Highway Rules, appellant collect and retain the toll for themselves. It is his further submission that no consideration is flowing from NHAI to the appellant. In the entire contract, the money flows from the appellant to NHAI. After successfully bidding the right for toll collection. Hence appellant cannot be considered as agent/representative for levying service tax.

3.2. It is further alternative argument if toll collection is considered as a service, benefit of Notification 13/04 -ST dated 10.09.2004 would be available as toll is a specie of tax and is enforced contribution imposed by Central Government and remitted to Pay and Accounts officer (National Highway), Ministry of Surface Transport, New Delhi.


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