Case Law Details
Traffic Manager Vs Commissioner of Service Tax-I (CESTAT Mumbai)
The issue under consideration is whether the service tax is applicable to the collection of Octroi for entry of goods in the discharge of sovereign privilege?
CESTAT states that collection of octroi by the appellant, on examination of the legal framework, finding it useful to restate the foundations. That levy and collection of tax is a sovereign privilege and must have authority of law enacted by the Union Parliament or the legislatures of constituent states is not in dispute. It is also not in doubt that List II of the Seventh Schedule in the Constitution of India empowers the legislatures of the constituent states to levy and collect tax on ‘entry of goods’ which is, essentially, what octroi is. The collection of octroi for the entry and consumption of specified goods in Greater Mumbai has been legislated under the Mumbai Municipal Corporation Act, 1888 and, in terms of the Mumbai Municipal Corporation (Levy of Octroi) Rules, 1965, Mumbai Port Trust, a statutory authority established under law and subsequently incorporated within the ambit of Major Port Trusts Act, 1963, was one of the three agencies of the Central Government empowered-and not by contract-to enforce collection. In this scheme, CESTAT fail to see the lack of any deviation from this charge of sovereign functions and in any way distinct from the empowerment of the officers of central excise to collect service tax. Retention of a portion of such collection, as mere procedure of transfer, is not distinguishable from the allocation of estimates to the field formations of the Central Board of Excise & Customs for meeting administrative expenses. The conclusion, inevitably, is that the collection of octroi by the appellant is in pursuance of discharge of sovereign privilege. In view of the above, which rules out the invoking of Finance Act, 1994 against the amount retained by the appellant, CESTAT do not find it necessary to ascertain if the activity is taxable service under the scheme of enumerations or the negative list regime. Accordingly, they set aside the impugned order and allow the appeal.
FULL TEXT OF THE CESTAT JUDGEMENT
Mumbai Port Trust, a body corporate established under the erstwhile Bombay Port Trust Act, 1879 and, since 1975, under the aegis of the Major Port Trusts Act, 1963, is aggrieved by the crystallisation of liability of ₹21,19,68,032/- under section 73 of Finance Act, 1994, along with appropriate interest under section 75 of Finance Act, 1994, besides being imposed with penalty of like amount under section 78 of Finance Act, 1994 and as the demand was held to be liable for recovery from the Traffic Manager on whom penalty of ₹10,000/- under section 77 of Finance Act, 1994 was also imposed, that functionary is before us.
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art14,15[1],16[2] art 21 –service matters –to be dealt –proofs are number of–be ready to fight in tshc or in sc delhi.already filed with 14039/2019 with insufft affidavits
suunkaran