Bus Terminal Adda-Fees Not Taxable as Business Support Service: CESTAT Chandigarh

Punjab Infrastructure Management Co. Vs Commissioner of Central Excise and Service Tax (CESTAT Chandigarh)

Summary: The Customs, Excise and Service Tax Appellate Tribunal, Chandigarh, considered the appeal filed by M/s Punjab Infrastructure Management Co. against the Order-in-Original dated 30.01.2014 passed by the Commissioner of Central Excise, Chandigarh-II. The impugned order had confirmed service tax demand of ₹24,81,931/- under Section 73(1) of the Finance Act, 1994, along with interest under Section 75, penalty of ₹5000/- under Section 77 and penalty of ₹24,81,931/- under Section 78.

The Appellant had been engaged as a “management contractor” by the Government of Punjab/PUNBUS for operation and maintenance of bus terminals/bus stands at Nawanshahar and Moga. The Department treated the activity as taxable under the category of ‘Business Support Service’ and issued a Show Cause Notice dated 24.02.2012 invoking the extended period of limitation for the period December 2006 to September 2011.

The Appellant contended that the bus terminals were public utility infrastructure created and regulated by the State Government, that the adda-fee was fixed by the State Government and was merely collected by the Appellant under the Government mandate, and that there was no contractual arrangement between the Appellant and individual bus operators. It was therefore submitted that the essential ingredients of “Support Services of Business or Commerce” were absent. The Appellant also relied upon the decision in Rohan And Rajdeep Infrastructure Pvt Ltd Vs Commissioner of Central Excise & Service Tax (CESTAT Chandigarh).