The Chandigarh bench of the Custom, Excise and Service Tax Appellate Tribunal (CESTAT) held that the collection of adda fee or bus stand fee by the transport corporation cannot be equated to “Business Support Service” as they are discharging their functions as a statutory authority.
Chandigarh Transport Corporation, the appellant assessee was engaged in providing transport facilities to the general public in the Union Territory of Chandigarh. The assessee appealed against the interim order passed by the Commissioner (Appeals) for imposing of penalty.
R.K. Hasija, the counsel for the assessee contended that the impugned order wrongly classifies Adda Fees/ bus stand fee as per “Support Services of Business and Commerce”.
It was further submitted that the bus stands are constructed by the Government as a public utility service and not to support the business of bus operators and adda fees were collected as a statutory levy in the exercise of powers conferred by section 67 (1) of the Motor Vehicles Act, 1988, the money collected to ensure the maintenance of the bus stands.
Shivani, the counsel for the revenue relied on the decisions made by the lower authorities and contended that the assessee provided taxable services are under the following:-
(a) renting of immovable property
(b) selling of space and time for advertisement
(c) support service of business and commerce.
The bench observed that the assessee is performing a statutory function in respect of the maintenance of the bus stands. In the course of the same, they are collecting some fees from the bus operators.
Further observed that the collection of adda fee cannot be equated to “Business Support Service” as they are discharging their functions as a statutory authority rather than promoting the business of bus operators.
The two-member bench comprising S. S. Garg (Judicial) and P. Anjani Kumar (Technical) held that the penalties imposed cannot be sustained and liable to be deleted while allowing the appeal filed by the assessee.
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