Custom, Excise & Service Tax Tribunal
M/S. Systematic Intel Industries Pvt. ... vs Commissioner Of Central Excise & S.T., ... on 8 May, 2015
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : ST/11967/2014 (Arising out of OIA-VAP-EXCUS-000-APP-586-13-14 dated 14.03.2014, Passed by Commissioner (Appeals) Central Excise, & S.T., Vapi) M/s. Systematic Intel Industries Pvt. Limited : Appellant (s) VERSUS Commissioner of Central Excise & S.T., Vapi : Respondent (s)
Represented by :
For Appellant (s) : Shri S.J. Vyas, Advocate For Respondent (s) : Shri S.K. Sikdar, Authorised Representative For approval and signature :
Mr. H.K. Thakur, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3 Whether their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes CORAM :
Mr. H.K. Thakur, Honble Member (Technical) Date of Hearing / Decision : 08.05.2015 ORDER No. A/10533 / 2015 Dated 08.05.2015 Per : Mr. H.K. Thakur;
This appeal has been filed by the appellant with respect to OIA No. VAP-EXCUS-000-APP-586-13-14 dated 14.03.2014. Under this OIA, the first appellate authority has confirmed the demand of Rs. 3,02,401/- alongwith interest and imposition of penalty. However, demand of Rs. 43,926/- with respect to duty demand on debit notes was set-aside by the first appellate authority with respect to interest thereon and penalty.
2. Shri S.J. Vyas (Advocate) appearing on behalf of the appellant argued that the demand of Rs. 3,02,401/- is with respect to certain amounts which were shown in the balance sheet as payment of freight. Learned Advocate brought to the notice of the Bench Annexure A to the show cause notice dated 14.03.2013 and argued that the freight charges were not paid by the appellant to the transporters but these were the charges which supplier of the goods M/s. JSW Steel Limited charged the appellant in the invoices/ bills. He made the Bench go through one such invoice No. 17007364 dated 06.10.2009 where such freight of Rs. 3,212/- was recovered from the appellant in the invoice and which was paid by M/s. JSW Steel Limited to the transporter. It was the case of the appellant that once freight was not paid by them, then they were not liable to pay any service tax on GTA services on reverse charge basis. Learned Advocate also argued that on realisation of factual details, revised balance sheets were reconstructed and submitted to the lower authorities. That as per the findings of the adjudicating authority the information submitted by the appellant were got verified from the jurisdictional range officer, vide file No. SLV-I/Dn.III/Systematic/2013-14 dated 24.10.2013. It was his case that on verification, it was confirmed by the jurisdictional range officer that the supplier of the goods has charged the freight in the invoices but has given a wrong conclusion that consignee is required to pay service tax. It was the case of the appellant that required verification report dated 24.10.2013 was not given to them. Learned Advocate argued that on merits the appellant is not required to pay service tax on the amount which is not paid to the transporter.
3. Shri T.K. Sikdar, (AR) appearing on behalf of the Revenue argued that the freight was ultimately paid by the appellant and therefore, they were required to pay GTA service tax even if the payments were not directly made to the transporters.
4. Heard both sides and perused the case records. The appellant produced the sample invoices under which the materials have been supplied to the appellant. The sample invoices indicate that freight amount is recovered from the appellant. It has been observed by the appellate authority that once the goods are supplied on FOR destination basis then the freight has to be considered as to have been paid by the consignor when the goods are supplied on FOR destination basis. The observation made by the first appellate authority does not convey that the freight has been directly paid by the appellant to the transporter. Rather the invoices produced by the appellant indicate that amount of freight has been recovered from the appellant. The verification report dated 24.10.2013 made by the jurisdictional range officer also conveyed that supplier of the material to the appellant has charged the freight in their invoices. Copy of this report has not been given to the appellant. The orders passed by the lower authorities are, therefore, in gross violation of principles of natural justice. This case is required to be remanded back to the adjudicating authority with direction to provide a copy of the report dated 24.10.2013 to the appellant and decide the case afresh in remand proceedings, after giving an opportunity of personal hearing to the appellant. The appellant should produce all the documentary evidence required to be establish that the freight is not paid by them to the transporters. It is made clear that all the issues are kept open for the adjudicating authority to deliberate upon.
5. Appeal is allowed by way of remand to the adjudicating authority.
(Order dictated and pronounced in the Court) (H.K. Thakur) Member (Technical) .KL 4