JUDGMENT : N. Paul Vasanthakumar, J. These writ petitions are filed by the manufacturers of Arms and Ammunition i.e. manufacturer of shot guns. In writ petition No. 1391 of 2010, the petitioners have prayed to quash communication dated 27.07.2010 in reference to HQ DQA (A) letter dated 04.06.2010 by which service tax arrears in respect of the petitioners’ unit and procedure for depositing the service tax has been intimated and for restraining the respondents from charging any service tax on the petitioners as they do not come within the purview of Finance Act, 1994 under which the service tax is being charged. 2. In writ petition No. 1563 of 2014, the petitioners have prayed to quash communications issued by respondent No. 5 to the petitioner Nos. 1 to 10 dated 31.10.2013 levying service tax at the rate of 12.35% along with proof testing charges at the time of collection of Barrels as it is in violation of the circular of Government of India, Ministry of Finance, Department of Revenue, Tax Research Unit dated 23.08.2007 and 21.02.2012 and to quash the order issued by respondent No.6 dated 05.02.2013 whereby it has been clarified that quality testing on behalf of shot gun firms fits under the definition of ‘Support Services’ and hence taxable and directing the respondents not to levy, charge or recover any service tax under the Service Tax Act/Finance Act 1994 as the service being rendered and provided by respondent No.5 in proof testing of guns manufacturer by the petitioners do not fall within the ambit of Service Tax Act promulgated vide Finance Act 1994 as has been held by Commission of Customs, Central Excise and Service Tax Bhopal vide order dated 21.02.2012. 3. The case of the petitioners is that they are licensed manufacturers of guns and their units are located in Jammu and the promoters of the petitioners are also citizens of India and permanent residents of J&K State. According to the petitioners, they are manufacturing guns in terms of the licences granted to them by Government of India and those guns manufactured are being sent for proof testing before respondent No.5 in Writ Petition No. 1563/2014 which is a Senior Quality Assurance Officer, Ministry of Defence, Government of India at Kanpur. According to the petitioners, they are manufacturing guns in terms of the licences granted to them by Government of India and those guns manufactured are being sent for proof testing before respondent No.5 in Writ Petition No. 1563/2014 which is a Senior Quality Assurance Officer, Ministry of Defence, Government of India at Kanpur. One of the conditions of the licence is that the gun manufacturers have to sent the manufactured guns for quality test at laboratory and it is only after the guns pass through various tests as per the standards prescribed by Government .of India, Ministry of Defence, the same can be sold in the market. For conducting the proof testing, the said laboratories are collecting statutory fee for quality assurance/proof charges from the gun manufacturers at the rate of Rs.1100/- for Double Barrel Gun and Rs.550/- for Single Barrel Gun. The impugned orders were issued by respondent No.5 seeking service tax at the rate of 12.35% for the proof testing charges and the petitioners being aggrieved have filed these writ petitions and this Court granted interim order due to which the petitioners have not paid the service tax as demanded. 4. The contentions of the petitioners in these writ petitions are that the service tax is not applicable to the State of Jammu and Kashmir as Section 64 of the Finance Act 1994 has not been extended to the State of J&K, therefore, imposition of service tax is contrary to the provisions of law. The clarification issued by respondent No.6, which has been made the basis to demand service tax by respondent No.5, is erroneous as respondent No.6 does not have any authority or power to interpret the provisions of the Finance Act, 1994 and the same are in violation of clarifications issued on 23.07.2007 and 21.02.2012, therefore, levying/charging or collection of service tax from the petitioners by impugned orders is erroneous. 5. Objections have been filed by the respondents stating that as per Rule 4 of the Place of Provisions of Service Tax Rules, 2012, the locations where the services are actually performed is relevant for purposes of demanding service tax and the goods having temporarily come into physical possession or control of the service providers, the service tax is levyable. 5. Objections have been filed by the respondents stating that as per Rule 4 of the Place of Provisions of Service Tax Rules, 2012, the locations where the services are actually performed is relevant for purposes of demanding service tax and the goods having temporarily come into physical possession or control of the service providers, the service tax is levyable. It is also stated that the impugned circular issued dated 31.10.2013 is in tune with the said Rule and therefore writ petition challenging the circular is not maintainable. 6. Mr. Sunil Sethi learned senior counsel appearing for the petitioners argued that Section 64 (Chapter V) of the Finance Act, 1994 deals with levy of service tax and excludes the applicability of the service tax to J&K State and Central Board of Customs and Excise New Delhi vide circular No. 56/5/5/2003 dated 25.04.2003 has clarified that service tax is a destination based consumption and the principle of consumption would determine the liability of service tax. On the basis of said circular, the learned senior counsel contended that the manufactured guns are sent to Senior Quality Assurance Officer, Kanpur for proof testing and after proof testing, the guns are brought back and the same are being sold in Jammu which is the destination of sale, hence the service tax as demanded from the gun manufacturers who are having their units at Jammu is contrary to the Finance Act 1994 under which alone service tax is leviable. The learned senior counsel also argued that in the objections, Rule 4 of “Place of Provision of Services Rules, 2012” is being relied and the said Rule having been framed in exercise of powers under the Finance Act, unless the Act is made applicable, the Rules framed there-under will not apply, therefore, objection raised in the writ petition to sustain the impugned orders are erroneous. The lea riled senior counsel also argued that the similar issue was already considered by the office of Commissioner of Customs, Central Excise and Service Tax Bhopal by order dated 21.2.2012 and while relying on an earlier order passed by CESTAT, and in the decision reported in MANU/CE/0260/2010 (Harshita Handling v. Commissioner of C. Ex.) it has been laid down that activities which are purely in public interest and are undertaken as mandatory statutory requirement to upkeep them for use shall not to be treated as service provided for consideration and such activities do not constitute taxable services and any fee collected in such cases is not to be treated as consideration for the purpose of levy of service tax. Civil Appeal D. No (s) 36503 of 2010 filed before the Hon’ble Supreme Court was dismissed on 05.01.2011. Learned senior counsel argued that the issue is therefore no longer res integra. 7. Learned counsel appearing for the respondents argued that the petitioners having sent their guns for testing to respondent No.5 at Kanpur, where Section 64 (Chapter V) of the Finance Act 1994 is applicable, the testing charges paid by the petitioners is liable for levy of service tax and based on the clarification, which in turn is as per Rule 4 of 2012, the orders of demand were issued and there is no illegality in the said orders. 8. We have considered the rival submissions. 9. It is not in dispute that Units of the writ petitioners are granted licence to manufacture shot guns under Section 5 of the Arms Act, 1959 by Government of India, Ministry of Home, New Delhi and the promoters of the petitioners’ units are residents of J&K State. Section 64 (Chapter V) of the Finance Act, 1994 is not applicable to the J&K State. It is also not in dispute that source to demand service tax is as per Chapter V of the Finance Act 1994. The learned counsel appearing for the respondents is relying on Rule 4 of the Place of Provisions of Services Rules, 2012 which states that the place where the services are actually performed the service tax is leviable to justify the demand of service tax. We need not go into the said issue In view of the other grounds which is raised and emphasised. We need not go into the said issue In view of the other grounds which is raised and emphasised. The Government of India, Ministry of Finance, Department of Revenue Tax Resource Unit by Circular No. 96/7/2007-ST. New Delhi dated 23rd August, 2007 issued clarifications to various services as to whether Services Tax is leviable to different kinds of services. In No. 999.01/23.08.07 it is clarified as follows:— 999.01/ Sovereign/public authorities perform functions assigned to them under the law in force, known as “statutory functions”. For example, Regional Reference Standards Laboratories (RRSL) undertake verification, approval and calibration of weighing and measuring instruments; Regional Transport Officers (RTO) issue fitness certificate to motor vehicles; Activities assigned to and performed by the sovereign/public authorities under the provisions of any law are statutory duties. The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy and are deposited into the Government account 23.08.07 Director of Boilers inspects and issue certificates for boilers; or Explosive Department inspects and issues certificate for petroleum storage tank, LPG/CNG tank in terms of provisions of the relevant laws. Authorities providing such functions, required to be performed as per law, may collect specific amount or fee and the amount so collected is deposited into government account. Such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. Therefore, such activities assigned to and performed by a sovereign public authority under the provisions of any law, do not constitute taxable services. Any amount/fee collected in such cases are not to be treated as consideration for the purpose of levy of service tax. Whether such activities of a sovereign/public authority, performed under a statute, can be considered as ‘provision of service’ for the purpose of levy of service tax and the amount or fee collected, if any, for such purposes can be treated as consideration for the services provided? However, if a sovereign/public authority provides a service, which is not in the nature of statutory activity and the same is undertaken for a consideration (not a statutory fee), then in such cases, service tax would be leviable as long as the activity undertaken falls within the scope of a taxable service as defined. However, if a sovereign/public authority provides a service, which is not in the nature of statutory activity and the same is undertaken for a consideration (not a statutory fee), then in such cases, service tax would be leviable as long as the activity undertaken falls within the scope of a taxable service as defined. On facts the 5th respondent is a Government of India establishment assigned with the job of proof testing of fire arms. The proof testing is required as per the statute to manufacture of fire arms for public safety. Under Rule 22 of the Arms Rule, 1962 testing fee alone is collected. The said clarification issued by the Revenue will bind the subordinate assessing authorities and one cannot expect a different order from respondents 6 and 7. A similar issue was already considered by Commissioner of Central Excise Bhopal against CESTAT final order No. ST/26/2010 (PB) in Appeal No. ST/346/2007 dated 26.04.2010 by holding that periodical testing of gas cylinder is a statutory requirement under Indian Explosives Act 1884 and therefore, it is not an activity covered for service tax either under maintenance and repair services or technical inspection and certification services and having aggrieved about the said order, Civil appeal filed before Hon’ble Supreme Court was dismissed on 05.01.2011. 10. Based on the said order, the office of Commissioner of Customs, Central Excise and Service Tax, Bhopal issued circular on 21.02.2012 by providing as under:— “.........Activities assigned to and performed by the sovereign/public authorities under the provisions of any law are statutory duties. The fee or amount collected as per the provisions of the relevant statute for performing such functions is in the nature of a compulsory levy and are deposited into the Government account. The testing of shot guns is similar to testing of gas cylinders, boilers and certificate given is similar to those given by RTO and electrical inspectorate. Hence on the same lines, I hold that the activity carried out by the notice pertaining to safety and health of the public which is mandated by the statutory requirement under the Indian Law. Therefore, such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. As it involves the safety of the public and it is bounden duty of the State to protect its citizens. Therefore, such activities are purely in public interest and are undertaken as mandatory and statutory functions. These are not to be treated as services provided for a consideration. As it involves the safety of the public and it is bounden duty of the State to protect its citizens. Therefore, such activities assigned to and performed by a sovereign/ public authority under the provisions of any law, do not constitute taxable services. Any amount fee collected in such cases is not to be treated as consideration for the purpose of levy of service tax......” 11. From the above order of CESTAT, affirmed by Hon’ble the Supreme Court, and Circular No. 96 issued by Government of India, Ministry of Finance, Department of Revenue, Tax Resource Unit, New Delhi in Circular No. 96/7/2007-ST dated 23.08.2007 as well as the clarification issued by Commissioner of Customs, Central Excise & Service Tax, Bhopal dated 21.02.2012, the operative portions of which are extracted above, and having regard to the fact that the Senior Quality Assurance Officer, being authorised office for testing, and the petitioners having paid only testing fee for fire arms, which is a statutory requirement under Rule 22 of the Arms Rules, 1962, no service tax can be levied on the petitioners who are granted license under Section 5 of the Arms Act, 1959 even if the service provider i.e. the Senior Quality Assurance Officer is in Kanpur where Section 64 of the Finance Act, 1994 is applicable. 12. In fine the impugned demand notices issued against the petitioners, which are challenged in prayer (A) are quashed and the respondents are directed not to levy/charge or recover service tax from the petitioner towards testing fee paid to the Senior Quality Assurance Officer, Government of India, Ministry of Defence (DGQA), Kanpur. 13. The writ petitions are partly allowed. No costs.