Custom, Excise & Service Tax Tribunal
M/S. Swarna Tollway Pvt. Ltd vs Commissioner Of Customs, Central ... on 30 May, 2014
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH BANGALORE Final Order No. 20943-20944 / 2014 Application(s) Involved: ST/EH/27742/2013, ST/EH/20797 - 20798/2014 in ST/1008 - 1009/2011 - DB Appeal(s) Involved: ST/1008/2011-DB, ST/1009/2011-DB [Arising out of Order-in-Original No. 1/2011-S. Tax dated 07/01/2011 and Order-in-Original No.2/2011 dated 01/02/2011 both passed by the Commissioner of Customs, Central Excise and Service Tax, Guntur.] M/s. SWARNA TOLLWAY PVT. LTD. H No.1-89/1,PLOT NO 42&43, KAVURI HILLS, PHASE 1, MADHAPUR HYDERABAD-50081 Appellant(s) Versus Commissioner of Customs, Central Excise and Service Tax GUNTUR NULL P.B.NO. 331, C.R.BUILDING, KANNAVARI THOTA, GUNTUR - 520004 ANDHRA PRADESH Respondent(s)
Appearance:
Mr. G. Prabhakar Sastry, Advocate C.T. KRISHNAMURTY ADV & R.MURALIDHAR ADV C.T.K. TAX CONSULTANCY,7, H.No.6-3-856/16, Niraj Public School Lane, Ameerpet, Hyderabad - 500 016. For the Appellant Mr. Ganesh Havannur, Addl. Commissioner (AR) For the Respondent CORAM:
HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER HON'BLE SHRI S.K. MOHANTY, JUDICIAL MEMBER Date of Hearing: 30/05/2014 Date of Decision: 30/05/2014 Order Per : B.S.V.MURTHY Both the appellant and the Department are seeking early hearing of the appeals filed on the ground that the amount involved is substantial. After hearing both the sides, we came to the conclusion that appeal itself can be decided finally. Accordingly both the early hearing applications are allowed and appeals are taken up for consideration.
2. The appellant is engaged in the activity of Build Operate Transfer (BOT), pertaining to infrastructure sector, wherein they are required to build roads, carry out the operations and hand over the same to National Highways Authority of India (NHAI) after 30 years. For these activities, they are allowed to collect toll from the users of the road built by them for a period of 30 years as per the Toll Charges fixed by NHAI from time to time. NHAI and CIDBI (CIDB Inventures SDN.BHD), Malaysia entered into a Memorandum of Agreement (MOA) on 19.12.2000 recording the principal terms with the regard to the BOT project. As per MOA, CIDBI was required to constitute a Special Purpose Vehicle (SPV) for the purpose of implementing the project. Pending constitution of the SPV, Concession Agreement was entered into on 27.3.2001 between NHAI and CIDBI. Subsequently, CIDBI jointly with others promoted and incorporated Swarna Tollway Pvt. Ltd. (STPL) as SPV. NHAI, CIDBI and STPL entered into a Tripartite Assignment Agreement dated 29.6.2001 wherein the Concession Agreement was assigned and transferred to STPL, who have unconditionally agreed to accept the same and perform the Concession Agreement as if the said agreement was entered between NHAI and SPV (STPL). Accordingly, STPL has been performing all the activities like building, managing, operating and maintaining the project highways etc., and is collecting the Toll Charges from the users of the National Highway. The Department issued show-cause notice alleging that the toll charges are being collected by STPL on behalf of CIDBI and the service tax is required to be paid under the head of Business Auxiliary Service. The show-cause notice alleged that in terms of Notification dated 28.4.2004 issued by the Ministry of Road Transport and Highways, CIDBI has been named as the Concessionaire and not STPL. Therefore, it follows that STPL is collecting the toll charges on behalf of CIDBI, thereby rendering Business Auxiliary Services to CIDBI. The show-cause notice demanded service tax on the entire toll charges collected from the vehicle even though the allegation was that the appellants are acting as collection agents for CIDBI. Thus the demand was highly inflated. The appellants countered the allegations, stating that in view of the Tripartite Assignment Agreement, it is the appellant who is the concessionaire and not CIDBI. Therefore the question of rendering any service in the form of collection of toll charges on behalf of CIDBI does not arise. The appellants relied on the various provisions of Memorandum of Agreement, Tripartite Assignment Agreement, and also adduced additional evidence in the form of letters from the lead Banker M/s. IDBI, wherein they are treating the appellant only as the Concessionaire and accordingly the funds have been released to them. The appellants have also produced the letter from the Income Tax department, wherein the income tax concessions available to the Concessionaire has been granted only to the appellant and not to CIDBI. They also produced several letters from NHAI, who is also a party to the Tripartite Assignment Agreement, clearly stating that only the appellant (STPL) is the Concessionaire. The issue of Concessionaire has been clearly settled by way of Notification dated 13.5.2009 by amending the preamble of the earlier Notification No.S.O.539 (E) dt. 28.4.2004, clearly specifying that M/s. Swarna Tollway Pvt. Ltd. as the Concessionaire. A copy of the same was submitted to the adjudicating authority at the time of personal hearing. The appellants also pleaded that even as per the departments allegations that they were acting as collection agents, though not admitting, the demand should have been made only of the commission charges, if any, paid by CIDBI. As a matter of fact, there was no such commission paid at all.
3. It was submitted by the learned counsel on behalf of the appellants that the issues involved in these appeals have reached finality with the decision of the Honble High Court of Andhra Pradesh orders Nos. 3, 4, 5 and 26/2012 dated 27.11.2012 in the case of the same appellant on the same issue. On going through the copy of the order submitted, we find this to be so. It was also submitted that the remaining 4 show-cause notices which were issued and covered subsequent periods have been adjudicated and in the orders No.20/2013 dated 26.3.2013 and 21/2013-S.Tax dated 29.3.2013, the Commissioner had dropped further proceedings.
4. The discussions above would show that the matter is no longer res integra and is settled in favour of the appellant by the decision of the Honble High Court of Andhra Pradesh. Accordingly the appeals are allowed with consequential relief, if any, to the appellants.
(Operative portion of the order has been pronounced in open court) S.K. MOHANTY JUDICIAL MEMBER B.S.V.MURTHY TECHNICAL MEMBER rv 3