Case Law Details
Mateshwari Indrani Contractors Pvt Ltd Vs C.C.E. & S.T. (CESTAT Delhi)
Service Tax under the category of ‘Business Auxiliary Service’ would become liable only if the service is rendered in relation to the business of the recipient. In the present case, the appellant, as a contractor, has engaged in collecting statutory levies on behalf of the Government department (CTD)/ statutory authority (NHAI) neither of whom are engaged in business. Secondly, we are of the view that the levy of Service Tax cannot be sustained on the Commission retained by the appellant.
In respect of the activity of toll collection, it is also fairly well settled that no Service Tax can be levied on such an activity as held by the Tribunal in the case of Commissioner v/s Intertoll ICS (supra) in which the Tribunal observed as under:-
“6. On merits of the matter, we find that National Highway Authority of India has availed services of the respondents. Fundamentally, the said National Highway Authority of India (NHAI) is not established by Revenue to be business concern nor a commercial concern not being engaged in any business activity. Therefore providing business auxiliary services by respondents to such NHAI is inconceivable. Therefore, for such reason, we dismiss the appeal of the Revenue without approving reasons given by the adjudicating authority.”
On the activity of collection of commercial taxes, for CTD we are of the view that the appellant will also be entitled to the benefit to exemption under Notification No. 13/2004-ST dated 10/09/2004 which specifically exempts the services provided by any person to the Government of State in relation to collection of any duties or taxes levied by the Government from the whole of the Service Tax leviable thereon.
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