Custom, Excise & Service Tax Tribunal
M/S Karamchand Thapar & Bros.(Coal ... vs Commissioner Of Service Tax, Kolkata on 4 October, 2012
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Service Tax Appeal No.30/07
Arising out of O/Os No.21-22/Commr/ST/Kol/2006-07 dated 31.3.2007 passed by Commissioner of Service Tax, Kolkata.
For approval and signature:
SHRI S. K. GAULE, HONBLE TECHNICAL MEMBER
DR. D. M. MISRA, HONBLE JUDICIAL MEMBER
1. Whether Press Reporters may be allowed to see
the Order for publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982? :
2. Whether it should be released under Rule 27 of the
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not? :
3. Whether His Lordship wishes to see the fair copy
of the Order? :
4. Whether Order is to be circulated to the Departmental
Authorities? :
M/s Karamchand Thapar & Bros.(Coal Sales).Ltd. .APPELLANT(S)
VERSUS
Commissioner of Service Tax, Kolkata RESPONDENT (S)
APPEARANCE Shri N.K.Poddar, Sr.Advocate for the Applicant (s) Shri N.C.Roy chowdhary, Sr. Advocate for the Respondent CORAM:
SHRI S. K. GAULE, HONBLE TECHNICAL MEMBER DR. D. M. MISRA, HONBLE JUDICIAL MEMBER DATE OF HEARING : 04.10.2012 DATE OF PRONOUNCEMENT : 02.04.2013 ORDER NO.A-84/KOL/13 Per DR.D.M. MISRA:
This is an appeal directed against the order in original No. 21-22/COMMR/ST/KOL/2006-07 dated 31/03/2007 passed by the Commissioner of Service Tax, Kolkata.
2. Briefly stated facts of the case are that the appellant had entered into contracts with various Electricity Boards, Cement manufacturers etc. during the period from 01/09/1999 to 31/3/2004 for providing various services relating to movement of coal from collieries to the respective power houses, cement companies etc. at a consideration, agreed between the appellant and the said clients. On the basis of intelligence, and subsequent investigation, it was alleged that the appellant during the aforesaid period had provided services under the category of Clearing and Forwarding Agents but failed to comply with the formalities required under the Finance Act, 1994 and also failed to discharge Service Tax on the said services rendered. A Show Cause Cum Demand Notice was issued to them on 19/10/2004 demanding service tax of Rs.22,99,86,707/- for the period from 01/09/1999 to 31/3/2004. The Ld. Commissioner, on adjudication, confirmed the demand of Rs.21,74,78,903/- under Section 73(2) and imposed penalty under various provisions, including equivalent penalty of Rs.21,74,78,903/- under Section 78 of the Finance Act,1994. Aggrieved by the said order, the appellant are in appeal before this Tribunal.
3. The Ld. Sr. Advocate assailing the impugned Order had advanced, mainly, the following arguments: (i) the adjudicating authority has no jurisdiction;(ii) the services rendered by the Appellant do not fall under the category of Clearing and Forwarding Agent, (iii) the demand is barred by limitation; and(iv) the computation of demand is incorrect.
3.1 The Ld. Sr. Advocate, Shri N.K. Poddar for the Appellant, at the outset, submitted that the Ld. Commissioner, Service Tax, Kolkata lacks jurisdiction in passing the impugned Order as relevant agreements with the power houses, cement companies, etc. were entered into by respective local/branch offices of the appellant, located at Vododara, Nagpur, Chennai , Bangalore, Delhi, Raipur; besides, services were rendered from these locations and also bills for the said services were raised from the respective branch offices, hence, fall outside the territorial jurisdiction of the Commissioner of Service Tax, Kolkata.
3.2 The Ld. Advocate submitted that as per Rule 3 of the Service Tax Rules, 1944, the Central Board of Excise and Customs has been empowered to appoint such Central Excise Officers as it thinks fit for exercising the power under Chapter V of the Finance Act, 1994, within such local limits, as would be assigned to them. Further, he has contended that Rule 4(1) of the said Rule provides that every person is required to apply to the concerned Superintendent of Central Excise in form ST-1 for registration within a period of 30 days from the date of which the service tax under Section 66 of the Finance Act, 1994, is levied. Further, under sub-Rule(2), or Sub-rule 3A, an assessee could opt for a common Registration, having centralized billing system or centralized accounting system, as the case may be, when services were rendered from branch offices located under different jurisdictions.
It is his submission that appellant had neither opted nor made any application for centralized registration prior to 2nd November, 2005. Hence, the Rule as was in force only be applicable to the facts of the present case.
3.3 It is the contention of the Ld. advocate that Sub-Rule (2) of Rule 4 of the said Rules clearly provides that an assessee may opt for centralized registration only when it has a centralized billing system. In other words, centralized registration at the material time was depending upon two conditions, namely, centralized billing system maintained by an assessee and secondly, exercise of option by the assessee for centralized registration. In absence of fulfillment of any of these conditions, centralized registration, was not at all possible. He has submitted that in that event, Sub-Rule (3) of Rule 4 of the said Service Tax Rules, would be attracted, wherein it is prescribed that an assessee iproviding taxable service from more than one premises or offices and does not have any centralized billing system, it has no option but to make separate application for registration in respect of each of such premises or offices to the concerned Superintendent of Central Excise.
3.4 He has further contended that Sub-Rule (3A) of Rule 4 of the Service Tax Rules would apply in cases where assessee has centralized accounting system and the Commissioner of Central Excise permits such assessee to seek centralized registration and the Commissioner would grant such registration only after he was satisfied that it would not be detrimental to the interest of Revenue. The Ld. Advocate contended that the materials on record did not show that the appellant had maintained any centralized billing system at Kolkata and/or that it had opted for Centralised Registration during the period 1st September, 1999 to 31st March, 2004.
3.5 The ld. Advocate further submitted that since all its clients had been situated outside Kolkata and the billing also done from respective Branch offices outside Kolkata, the Commissioner of Service Tax, Kolkata had no territorial or other jurisdiction whatsoever to pass the impugned order dated 31/3/2007 covering all the aforesaid locations/ Branch offices. The Ld. Advocate submitted that the appellant also did not have any centralized accounting system in respect of the activities carried out at various places at the material time as each of the said offices used to maintain independent day to day accounts and billing at the respective places and also prepared the trial balances independently. The trial balances were brought to its Registered office at Kolkata only for the purpose of preparing and drawing of consolidated profit and loss account and balance sheet of the appellant in compliance with the provisions of Section 210 read with Section 277 and 278 of the Companies Act,1956. Thus, the commissioner has no jurisdiction to pass the impugned Order.
3.6 The Ld. Advocate unfolding the activities carried out by the Appellant while advancing his second limb of argument, on the issue of chargeability of service tax, under the category of clearing and forwarding agent, submitted that the following services were admittedly rendered by them during the relevant period:
(a) Co-ordination/ liaison with Coal Mining Companies and Railways for materialization of linkage and allotment of coal rakes;
(b) Informing the clients regularly by sending fortnightly/ monthly reports about linkage materialization, route restrictions and allotment limitations imposed by Railways, shortage of wagons etc., on a day-to day basis to facilitate the planning and scheduling coal movement ant coal stock at the Power Stations;
(c) Monitoring that proper indents are placed by the Coal Mining Companies for the railway wagons; and following up such indents for allotment of coal wagons by the Railways;
(d) .Obtaining day to day program of movement of coal from the collieries as well as the Railways, and keeping the Clients informed about such movement;
(e) Supervising loading of- coal to ensure that desired quality of coal is loaded to the full carrying capacity of the railway wagons, without there being any overloading and/or under-loading;
(f) Monitoring the quality and size of coal during loading, so as to minimize the incidence of loss of coal during transit, as also to ensure that oversize, lumpy coal, extraneous material, muddy coal, wet coal with excessive surface moisture is not loaded in the wagons;
(g) Monitoring supply of requisite quantity of coal, through proper weighment of loaded wagons, at the weigh bridges functioning at the Railway sidings of coal fields;
(h) Ensuring that the Coal Mining Companies do obtain Railway Receipts after loading of the coal, but before dispatch of the wagons;
(i) Monitoring the wagons movement to ensure-that these are not diverted by the Railway Authorities;
(j) In the case of Tamil Nadu Electricity Board (TNEB), the Assessee Company carried out the activities falling within the category of "Cargo Handling Services" within the Paradip Port. Handling Coal in relation to TNEB contract consists of composite operation such as supervising/ monitoring loading of coal into wagons at Talcher, unloading of coal from railway wagons at the stock-yard within the Paradip Port, storing of coal into the dumps of TNEB at the port, intra-port transportation from stock-yard to the wharf, stevedoring, shore handling etc. This activity is limited only for TNEB, and that too in relation to Paradip Port only. 3.7 The Ld. Adv. Submitted that the services rendered by the appellant to Tamil Nadu State Electricity Board (TNEB) mostly at Paradip Port, had fulfilled the conditions prescribed under the category of Cargo Handling services for which they were granted registration on 01/10/2003 by the Superintendent of Service Tax, Cuttack and they had been paying service tax w.e.f. 16/8/2002 under the said category.
3.8 The services rendered to Maharashtra State Electricity Board(MSEB), had also been alleged to be chargeable to service tax under the category of clearing and forwarding agent for the same period from 01/9/1999 to 31/3/2004 by the jurisdictional Commissionerate and on adjudication the same was confirmed and the issue is pending decision before CESTAT, Mumbai.
3.9 He has submitted that the appellant all along had been claiming that the aforesaid services rendered by them to its clients were liable to Service Tax only in the category of Business Auxiliary Service as defined under Section 65 (19) of Chapter V of the Finance Act, 1994; more particularly, Clause (iv) thereof Procurement of goods under services, which are inputs for the clients read with the explanation inserted w.e.f. 16/6/2005.
3.10 The Ld. Advocate further submitted that the scope of clearing and forwarding agent has been clarified by Notification bearing F. No. B43/7/97-TRU dated 11/7/97 issued by the Ministry of Finance, Department of Revenue as well as Trade notice No. 8/97-ST dated 11/7/97, issued by the Mumbai Commissionerate-I, which reads as below:
i. The Clearing and Forwarding agents are engaged/appointed by Manufacturer of gods (both excisable and non-excisable goods), producers and distributors of goods and shall also include such agents appointed for agricultural and mineral goods.
ii. Normally there is a contract between the principal and the Clearing and Forwarding Agent detailing the terms and conditions and also indicating the commission or remuneration to which the C & F Agent is entitled;
iii. A Clearing and Forwarding Agent normally undertakes the following activities a. receiving the goods from the factories or premises of the Principal of his agents;
b. warehousing these goods;
c. receiving dispatch orders from the Principal;
d. arranging dispatch of goods as per the directions of the Principal by engaging transport on its own or through the authorized transporters of the Principal;
e. maintaining records of the receipt and dispatch of goods and the stock available at the warehouse;
f. preparing invoices on behalf of the Principal.
iv. For the services rendered, the C & F Agent receives, from the Principal, commission or remuneration which usually consists of two components :
a. minimum commission on a flat rate or turnover basis depending on the packages/consignments handles;
b. a variable commission based on performance which is computed on the performance indicators agreed upon between agent and the Principal. This is usually given as a percentage of the turnover.
v. In the case of services rendered by Clearing and Forwarding Agents, the Service Tax liability shall be discharged by the person availing the service so rendered. In other words, the Principal who engages a Clearing and Forwarding Agent is the person responsible for collecting and paying the Service Tax to the exchequer. 3.11 Paragraph 3 of the Service Tax Circular No. 39/2/2002 dated 20/2/2002 further reiterated that C&F agent do the job of clearing and forwarding. In a typical situation, Clearing and Forwarding agents are appointed in outstation location by manufacturer or wholesale distributor so that they may clear the goods, store them and then forward the goods according to the instructions of the principal owner. Thus, the persons concerned is an agent and the agent is authorized representative of a named principal owner. Paragraph 10 of CBEC Circular dt.20.04.2002, also reiterated the same activities of C & F Agent.
3.12. The Ld Adv. advancing the argument on the scope of C & F agent, in the light of the aforesaid circulars, submitted that the C&F agent, normally, receives the goods from the factories or premises of principal or his agents, stores these goods, dispatches these goods as per orders received from principal or owner, arranges transport etc. for the purpose and prepares invoice on behalf of the principal. For all these services, the C&F agent receives commission on the basis of agreed terms. Therefore, an essential characteristic of the services fall under the category of C&F agent is that the relationship between the service provider and receiver should be in the nature of Principal (Owner) and agent. The C&F agent carries out all activities in respect of goods right from the stage of their clearances from the premises of principal, to its storage and delivery to the customer.
3.13 The Ld. Advocate further submitted that the expression Clearing and Forwarding operation has not been defined anywhere in the Finance Act, 1994.Therefore, it is necessary to analyse and understand its meaning in common parlance. Referring to the definition of clearing agent,in Advanced Law Lexicon(Third Edition 2005) and the meaning of Clearing as defined under the Random House Compact Unabridged Dictionary, the Ld. Advocate submitted that the activity of clearing thus involves freeing of ship or cargo. In the present case, there has been a contract of sale between the Coal Mining Companies and the State Electricity Boards. Accordingly, the Coal companies are responsible for loading the coal into the Railway wagons which are directed to reach destination already specified by the State Electricity Board. There is no occasion for the appellant to clear the coal at any stage whatsoever hence they could not be lawfully called as the clearing agent.
3.14 The Ld. Advocate further referring to the definition of forwarding agent in Blacks Law Dictionary (Fifth Edition) Advanced Law Lexicon (Third Edition-2005), Wests Legal Dictionary by William Statsky (1985 Edition), Penguin Business Dictionary, P.G. Osborn & S.T Grandage, Oxford English Dictionary (Words and Phrases (Permanent Edition-Volume 17) (WP) and that from the activity of forwarding agent mentioned, in the aforesaid dictionary meanings, indicate that a forwarding agent has to dispatch the goods strictly in accordance with the instructions of its principal. In the present case the coal moved directly under a contract of sales between coal mining company and the Electricity Boards and the destination of coal is known to the seller. The Railway racks are placed only for the destination, there has been no occasion at all for the State Electricity Board to indicate to the Appellant and consequently the Appellant to indicate to the coal mining company, the places to here the coal had to be dispatched. It is his submission that at no point of time the appellant takes over the custody or possession of the coal.
3.15 The Ld. Advocate contended that Clearing and Forwarding operations referred to the specific services of obtaining clearing of goods from certain authorities e.g. Port, Railways etc., warehousing those goods, receiving dispatch orders from the Principal and arrange their dispatch to the owners of the goods or to such other persons as may be instructed by the owner. The Clearing and Forwarding agent has to furnish the requisite documents on behalf of the Principal in order to obtain the clearance of the goods. It is his submission that in contrast to the said services, required to be carried out by a C&F agent, the appellant did not clear the goods (Coal) from the custody of any person whatsoever. The goods were directly loaded on the Railway wagons by the Coal Mining companies which were directly sold to Electricity Boards. The appellant did not take custody of the coal at any point of time. The appellant only carries out the supervision and liaison work in relation to the loading of the coal into the wagons so as to ensure that the coal loaded were of stipulated quality and quantity. The appellant did not undertake any loading operation and also any forwarding operation. Thus the activities performed by the appellant could not come within the purview of clearing and forwarding agent as defined under Section 65 (25) consequently not taxable service under Section 65(105(j) of Chapter (V) of The Finance Act,1994.
3.16 The Ld. Advocate referring to the judgment of Honble Punjab and Haryana High Court in the case of CCE, Panchkula Vs. Kulcip Medicines Pvt. Ltd. (2009) 14 Service Tax Review (STR) 608 (P&H), submitted that their Lordships in the said case had observed that if one renders service as forwarding agent without rendering any service as clearing agent, he cannot fall within the tax net of Clearing & Forwarding agent as both services have not been rendered by him. He has contended that Coal companies are responsible for loading the coal into Railway wagons in terms of contract of sale with the State Electricity Boards and hence there was no occasion for the appellant to clear the coal at any stage, whatsoever and/or to deal with the goods from the collieries to consumption sites.
3.17 Analyzing the meaning of forward, forwarder, forwarding agent, etc. he has submitted that forwarding agent or the freight forwarding company must necessarily receive/ take goods into his or/custody for transit, warehouse it and issue Bills of Lading, other documents for transportation of the goods, for or on behalf of the Principal, act as an agent for the owner of the goods to make arrangements with the carrier who would carry the goods viz. Ship owners, Railway Authorities etc. for delivery, whereas, in the present case, there was no occasion for the appellant to take over the custody of the coal and or actually deal with the coal from the collieries to the consumption sites. The coal moves under a contract of sale entered into by the coal Mining company directly with the State Electricity Boards, the destination to which the coal was to be delivered, was known to both the parties, the Railway rakes were placed only for that destination on the basis of indents made by the coal companies and the appellant had no role to play in any of these activities. The appellants role is that only it carries out the supervision and liaison work in relation to the loading of coal into the wagons in order to ensure that coal loading is to stipulated specifications, quality and quantity. It does not undertake any clearing or loading operation and also any forwarding operation either. In nutshell, his submission is that the appellant was neither engaged in clearing activity nor in any forwarding activity and hence cannot be covered under scope of C & F Agents even, if they are directly or indirectly linked with and/or otherwise, covered by the taxable service of forwarding and clearing operations of coal.
3.18. Further, he has submitted that the CBEC Circular dated 10/12/2003 relied upon by the Ld. Commissioner, dealt with the services of coal merchants working as agent of buyers. Referring to the meaning of merchant defined in the Blacks Law Dictionary, the Ld. Advocate submitted that the appellant was not a coal merchant engaged in purchase or sale of coals on behalf of its clients. It does not do any merchandising of coal, hence, the said circular is not applicable to them.
3.19 He has further submitted that the aforesaid principle has been laid down by the Larger Bench of Tribunal in the case of Larsen & Toubro Ltd. Vs. Commr. of Central Excise, Chennai (2006) 3 STR 321 (Del-LB) followed subsequently by the Tribunal in other cases and that there is no contrary decision passed by any Court. It is his submission that the Larger Bench at paragraph 13 of the said judgment considering the words directly or indirectly and in any manner referred to in the said definition of clearing and forwarding agent observed that these words cannot be read in an isolated manner from the activity of Clearing and Forwarding operations. This judgment has been accepted by the Department and also endorsed by the Honble Punjab & Haryana High Court in CCE Vs. United Plastomers (2008) 10 STR 229, 235 (P&H).Further, the Ld. Advocate submitted that the decision of Kolkata Bench of the Tribunal in Coal Handlers Pvt. Ltd. Vs. CCE (2004) 171 ELT 191 (KOL), is no longer a good law, since the said decision was wholly based on an earlier decision of the Tribunal in the case of Prabhat Zarda Factory (India) Ltd. Vs. CCE, Patna (2002) 145 ELT 222, which decision has been specifically over ruled by the Larger Bench of the Tribunal in L&T case (supra).
3.20 The Ld. Adv. further submitted that the activities rendered by the appellant are specifically covered under Sub-clause (iv) of Section 65(19) of Chapter V of the Finance Act, 1994, w.e.f. 10th September, 2004 and reading with the explanation inserted therein subsequently by the Finance Act,2005 w.e.f. 16/6/2005. It is his submission that if such cases were already covered under the category of clearing and forwarding agents then there was no need for the parliament to specifically amend the statute by the Finance Act, 2004 and Finance Act, 2005. It is his argument that subsequent amendments of 2004 & 2005 indicate that the appellant were not covered earlier under the category of clearing and forwarding agents as the services rendered by them was specifically brought through Legislative amendment, within the category of Business Auxiliary Services.
3.21 The Ld Sr. Adv. further distinguishing the judgment of Honble Karnataka High Court in the case of Commr. of Central Excise Vs. Mahaveer Generics (2010) 17 STR 225 (Kar.), submitted that the facts of the said case are different from the present one. In that case a mere reading of various clauses of the agreement, it clearly shows that M/s. Mahaveer Generics has been appointed by the appellant as a consignment agent to take charge of the product manufactured by M/s CIPLA Ltd., stores them in its godown and sale the products as consignment agent of the Principal at the price to be fixed by the Principal from time to time, after mutual consultation between the agent and the principal. However, in the present case the activities carried out by the appellant are completely different. He has further submitted that it is incorrect to say that the Honble Karnataka High Court did not accept the principle of law laid down by the Honble Punjab and Haryana High Court in Kulcips case (supra). He argued that in fact, the issue dealt by the Honble Punjab and Haryana High Court in Kulcips case, has not been dealt with or commented upon by the Honble Karnataka High Court in the Mahaveer Generics case(supra). On the same lines, he has also distinguished the facts in Vaman Pharma Pvt. Ltd. Case(supra) cited by the Revenue in contrast to the facts of their own case. Also he has submitted that the judgment of Larger Bench of Tribunal in Medpro Pharma Pvt. Ltd. Vs. Commr. of Central Excise, Chennai (2006) 3 STR 355 (Trib.-Delhi) (LB), cannot be made applicable to the facts of the present case, as the services rendered in that case was specifically not accepted to fall under the category of C&F agent, by the Honble Punjab and Haryana High Court and the said judgment was over ruled.
3.22 The Ld. Advocate further submitted that the appellant had received an aggregate sum of Rs.99,62,24,922 from Gujarat Electricity Board by way of service charge calculated @ 1.69% from the freight financing activity in the form of prepayment of Railway freight by the appellant on behalf of Gujarat Electricity Board in terms of a separate and independent agreement. The appellant had received the service charge calculated @ 1.69% of the amount of Railway freight pre paid by it on behalf of Gujarat Electricity Board. It is his submission that this activity of freight financing did not come under the alleged classification of clearing and forwarding agent. He has submitted that transport of goods by rail service was brought into the service tax net only in the year 2009. Initially, the services provided in respect of transportation of goods in containers by rail were made taxable from 1/5/2006, but its scope was expanded w.e.f. 1/9/2009. Since the present case involved was prior to 31/3/2004, there was no liability to service tax on transportation of goods by Railways. He has submitted that the judgment of the Tribunal in Bhagyanagar Services Vs. Commr. of Central Excise, Hyderabad (2006) 4 STR 22 (Trib-Bang.) supports their case instead of the Revenue.
3.23 The Ld. Advocate referring to the meaning fraud, willful mis-statement, collusion etc. submitted that the present demand is barred by limitation. In this connection he has referred to the judgments of the Honble Apex Court in the case of Cosmis Dye Chemical Vs. CCE (1995) 75 ELT 721, 723 (SC) , Pushpam Pharmaceuticals Co. Vs. CCE (1995) 78 ELT 401, 403 (SC) and Anand Nishikawa Co. Ltd. Vs. CCE (2005) 188 ELT 149 (SC). The Ld. Advocate further submitted that the appellant at all material time were under the bonafide belief that the nature of its activities and services rendered to its clients viz. State Electricity Boards as well as industrial consumers of coal being purely in the nature of supervision or liaison work in relation to the loading of coal into wagons, in order to ensure that the coal loading by the coal companies in the Railway wagons, is of stipulated specifications, quality and quantity, hence were not covered with the classification of taxable service under clearing and forwarding operations. This bonafide belief was entertained by the appellant from the Notification dated 11/7/1997 issued by the Ministry of Finance and the Trade notice dated 11/7/97 issued by Mumbai Commissionerate-I and opinion given by various advocates on the subject and also the judgments of the Tribunal and Honble High Courts on the said issue. Subsequent clarification issued by CBEC through its letter dated 10/12/2003 was challenged by the appellant before the Honble Mumbai High Court and it was later referred to the Ld. Commissioner of Service Tax at Nagpur for adjudication by the Hopnble High Court.
3.24 The Ld. Advocate finally submitted as there is no suppression, mis-declaration etc., penalty on them is also not applicable. In this connection he has referred to the decision of the Honble Supreme Court in Hindustan Steel Vs. State of Orissa (1969) 83 ITR 26 (SC) and Cement Marketing Co. Ltd. Vs. Assistant Commissioner of Sales Tax (1979) 124 ITR 15 (SC).
4. Per contra, the Ld. Sr. Advocate Shri Roy Chowdhary for the respondent had submitted that a Show Cause Notice dated 19/10/2004 was issued to the appellant stating that the activities undertaken by them, on behalf of their principals, were covered under the services of Clearing and Forwarding agent. After verification of the documents and examination of contracts between the appellant and its Principal, it was found that the appellant had suppressed the material facts before the Department and accordingly the Department was compelled to issue the SCN invoking extended period of limitation.
4.1 He has submitted that on receipt of the said show cause notice, the appellant had made an application on 02nd November, 2005 for centralized registration under Section 69 of the Finance Act, 1994 read with Rule 4 of Service Tax Rules, 1994 before the Commissioner of Service Tax, Kolkata. The appellant had filed reply to the said notice on 8/2/2006 and the Adjudicating Authority passed the present order on 31/3/2007 by directing the appellant to pay the said amount of tax, interest alongwith penalty. The main grounds of the said order are as follows:
(a) In the instant case, Noticee No.-1 undertakes activities that result in the clearance of coal from the collieries. These activities also result in the forwarding of coal so cleared to the destination of the coal consumers. It is Noticee No.-1 who maintains liaison, ensures the timely placing of wagons, supervises loading, ensures quantity, size and quality, ensures safe transit, ensures that goods are not lost in transit, informs the coal consumers of the receipt and dispatch, ensures that the required quantity of coal be supplied to the coal consumers and pays freight. There should not be any doubt that such activities belong to the realm and definition of clearing and forwarding operations. It is Noticee No.-1 who is responsible for the movement of coal from the collieries to the customers premises. There is no warrant in the claim that unless a person takes custody of the goods belonging to another or handles such goods, he cannot be treated as a clearing and forwarding agent. A clearing and forwarding agent is one who ensures the clearing or forwarding or both clearing and forwarding of goods and is responsible for such act. Therefore I have no hesitation in holding that the activities undertaken directly or indirectly, or in any manner involving documentation and arrangement of transfer of goods to their destination by Noticee No.-1 are in relation to clearing and forwarding operations and that Noticee No.-1 is a clearing and forwarding agent. Accordingly, contentions raised by Noticee No.-1 after relying on several case laws, trade notices, and CBEC circulars fail. [Pg-89 of the Paper Book-Vol-1].
(b) Noticee No.-1 has evaded the payment of Service Tax, payable on their services as clearing and forwarding agent provided to their Principals. They willfully suppressed the above facts and did not take any proper action for payment of proper service tax under the category of Clearing and Forwarding Agent. KCT have willfully attempted in the manner, stated hereinabove, with intent to evade payment of Service Tax right from the very beginning on the taxable service under the category of Clearing and Forwarding Agent rendered by them to their Principals by way of willful misstatement, by way of omission and failure by way of suppression and non disclosure of the material facts and contraventions of the provisions of Chapter-V of the Finance Act, 1994 and Service Tax Rules made thereunder.
Noticee No.-1 has contended that they were under a bonafide impression that the services in question did not attract Service Tax. This bonafide on their part is corroborated by the fact that they approached the Bombay High Court to seek clarification after receiving the Boards clarification dated 10.12.2003. Further their cooperation with the investigating officers establishes that the question of willful statement or suppression of facts does not arise. For the aforesaid reasons, the longer period of limitation is not invokable for recovery of Service Tax, reliance has been placed on Cosmic Dye Chemical=VS=CCE, Bombay [1995 (75) ELT 721 (SC)], CCE=VS=Chempher Drugs & Liniments [1989 (40) ELT 276 (SC) and Cipla Ltd.=VS=CE, Mumbai [2001 (137) ELT 972 (T)] in support of their contention.
I cannot accept the contention of Noticee No.-1. It has already held that they are a Clearing and Forwarding Agent. The position of law was not ambiguous during the period under dispute. CBEC vide circular dated 10.12.2003 reiterated the position of law already existing. Therefore, there is no escape from the conclusion that Noticee No.-1 did not apply for registration and did not furnish with returns only with intent to evade payment of tax. I am of the considered opinion that in the facts and circumstances detailed and discussed hereinabove, the longer period of limitation has been correctly invoked.[Pg-91 of the Paper Book-Vol-1]. 4.2 In response to the preliminary objection raised on behalf of the appellant, that the Commissioner lacks jurisdiction to decide the case, the Ld. Sr. advocate for the Revenue has submitted that the point of jurisdiction was never taken by the appellant in their reply to SCN or before the Adjudicating Authority, hence, the appellant should not be allowed to agitate the point of jurisdiction before this Tribunal as such an issue involves determination of facts. Nevertheless, it is his argument that the Commissioner of Service Tax, Kolkata has full jurisdiction over the Appellants activities as their whole accounting system was centralized at Kolkata and such centralized accounting system is a jurisdictional fact; the Service Tax Rules, 1994 had provided centralized registration after inserting amendment to the said Rule w.e.f. 28/2/1999. Thus, the appellants argument that no part of cause of action arose within the jurisdiction of Commissioner of Service tax at Kolkata and all the activities were involved outside Kolkata, was fully misconceived and misleading as their accounting system has been centralized at Kolkata. Such centralized accounting system is a jurisdictional fact which also, inter alia, provided for registration at such place or premises under the Finance act, 1994 read with Service Tax Rules including the Rules prior to such time.
4.3. On merit, the Ld. Sr. Advocate for the respondent submitted that the appellants activities and services clearly come and fall within the definition of Clearing and Forwarding agent as defined under Section 65 (25) of the Finance Act, 1994. He has submitted that the said definition has been made very wide by Parliament as is apparent from the face of it and also held by all the authorities that any service connected with the clearing and forwarding directly or indirectly, in any manner, whatsoever, will come within the purview of such definition. It primarily relates to movement of goods and things from (Coal Mines) through arrangements with transport(Railway) to the power houses. There are many examples or instances given by the departmental authorities and the Tribunals as to what may be considered as to activities of services of Clearing and Forwarding agent. The Ld. Sr. Advocate referring to the Circular of the Board dated 11/7/1997 and letter F. No. 159/1/2003-CX-4 dated 10.12.2003 submitted that the activities rendered by the appellant squarely covers under the definition of Clearing and Forwarding agent and the General Manager(Accounts) of the appellant company, during his interrogation by the investigating officers, has categorically admitted that the appellant are members of Indian Coal Merchants Association and hence, the mode of function of coal merchants would fall under the category of clearing and Forwarding Agent as per the clarification dated 10/12/2003 which are applicable to them.
4.4 Referring to the judgment of this Tribunal in Coal Handlers Pvt. Ltd. case,(supra) the Ld. Sr. Advocate submitted that the definition of Clearing and Forwarding agent refers to a person who has been engaged for providing any service, either directly or indirectly connected with clearing and forwarding operations in any manner to any other person and inclusive of a consignment agent. He has submitted that the use of the expression any and indirectly in the said definition of clearing and forwarding agent , indicative of the fact that the scope of the services to be provided by clearing and forwarding agent, is very wide; he is not the person who actually deals with the goods to be termed as clearing and forwarding agent, but even if the services are indirectly and if the same are connected with clearing and forwarding operations, in any manner, to the other persons, would be covered within the scope of the said definition. It is his submission that the appellant in the instant case render their services in all sections of pre-load of the coal rakes i.e. obtaining consent on behalf of their customers, sanctions from the office of Executive Director Rail Movement, supervising loading of the wagons, sending samples and assuring the proper quality and quantity, complying with the formalities relating to payments towards freight. As such, it is quite clear that the appellant is covered by the definition of clearing and forwarding agent. He has further submitted that the definition of clearing and forwarding agent being wide cannot be restricted to interpretation as given by the appellant as the same would defeat the very purpose of such legislation.
4.5 He has further submitted that the adjudicating authority in the impugned order has come to a finding that the appellant has been doing the activities and service of C&F agent on the basis of reliable evidence e.g. contracts with various power houses and cement companies. The appellants approach to show that they did not carry out the services of clearing or even forwarding agents work and they were merely doing liaison, supervision work, cannot be acceptable; their attempt is to somehow fall within the scope of the judgment delivered in the case of Kulcip Medicines Pvt. Ltd. case(supra). He has further submitted that the said case has been doubted and dissented in Mahaveer Generics case(supra) by the Honble High Court at Karnataka. The Honble Karnataka High Court differed with the view taken by Punjab and Haryana High Court in Kulcip Medicine case(supra). The Ld. Advocate has referred to the following judgments of Tribunal and Honble High Courts in support of his contention that the activities carried out by the appellant is squarely covered under the definition of C&F Agent.: i) Vaman Pharma (P) Ltd. Vs. CCE, Bangalore-2012 (26STR) 424 (Tri-Bang.)(ii) United Enterprises Vs. CCE, Service Tax, Patna-2009 (16 STR) 298(iii) Prabhat Jarda Factory (India) Ltd. Vs. Commr. of Central Excise, Patna -2002 (146) ELT 222 (Tri);(iv) Larsen & Tubro-Vs. Commr. of Central Excise, Chennai -2006 (3) STR 321;(v) Suchitra Marketing (P) Ltd. Vs. CCE, Jaipur-II 2009 (15 STR) 542 (Tri-Del).
4.6 In support of the confirmation of the demand for extended period, the Ld. Sr. Advocate for the department submitted that there is not an iota of doubt that the appellant had not disclosed and/or suppressed the material documents, especially the contracts between them and different power houses, Cement Companies, thus, the question needs for determination is, whether they did that willfully or in a bonafide manner resulting into failure to discharge the service tax. It is his contention that the appellant did not disclose and/or suppressed the relevant contracts/documents with an intention to evade payment of service tax for the work of clearing and forwarding agent rendered to their clients. Summarizing his argument on the issue of limitation, the Ld. Sr. Advocate submitted that the Boards Circular No. B.43/7/1997-TRU dt.11.07.1997 clearly included the contractual work of the Appellant under clearing and forwarding agent; the said circular is one of the examples of clearing and forwarding agent and not exclusive of other action and job which would amount to clearing and forwarding agent. He has submitted that the appellant has not given any ground, nor any evidence which would show that they could not have been carrying out clearing and forwarding work and as such the action was bonafide.
4.7 He has further submitted that the principles of law laid in Chemphar Drugs case and Cosmic Dye Chemicals case(supra) by the Honble Suprme Court are not applicable to the present case as the facts of the said cases are different from the present case. Distinguishing the said cases, he has submitted that that there were High Court decisions which led to the bonafide belief of the assessee and supported the assessees contention, why they had not disclosed their manufactured product. Further, he has submitted that all the authorities/decisions from 1997 to 2004 cited by the Appellant were against them, so it is not understood on what basis they could claim non-disclosure and suppression as bonafide.
4.8 Further, he has submitted that the appellant had not disclosed their business transactions prior to 2003 nor their representation as coal merchants. It is his submission that after repeated requests made by the Department on16.08,2004, 27.08.2004, 06.09.2004, 17.09.2004, 29.09.2004, they have partly disclosed the contracts with the various power houses. He has submitted that it is significant to note that in all the 2003 contracts with the Power Houses, there has been a deliberate attempt to suppress the real nature of contractual job and avoiding to fall within the definition of Clearing and Forwarding Agent, for instance, expression like, liaison, coordination , materialization of linkage, monitoring that proper indents are placed, monitoring the quality and size of coal, monitoring supply of requisite quantity of coal, monitoring the wagons movement, unloading of coal from railway wagons, storing of coal into the dumps, supervisory work etc. have been employed.
5. Heard both sides at length and perused the records. The Ld. Sr. Advocate for the appellant, at the outset, raised a preliminary issue, challenging the territorial jurisdiction of the Ld. Commissioner, in passing the impugned order. He has, however, fairly conceded that the issue of jurisdiction has not been raised during the adjudication proceeding before the Ld. Commissioner. It is his contention that the issue of jurisdiction, being a question of law, the same can be raised at any stage of the proceeding, including at the appellate stage.
5.1 Opposing the said contention, the Ld. Sr. advocate Shri Roychowdhary for the Revenue has submitted that since the issue is of territorial jurisdiction, a mixed question of fact and law, hence, the Appellant ought to have been raised the same before the adjudicating authority so that a finding on the facts could have been recorded by him. Having not raised it, at any time during entire adjudication proceeding, the appellant should not be allowed to raise the same before this forum, at this stage.
5.2 We find that no doubt, the issue of jurisdiction being fundamental one, as it questions the legality and maintainability of the Order, and thus, goes into the root of the matter, and it is a settled principle of law that the issue of jurisdiction could be raised at any stage of the proceeding, but, simultaneously, it also cannot be denied that when the territorial jurisdiction, is an issue, it becomes a mixed question of fact and law, hence, the same should have been raised at the threshold of the proceeding, so as to enable the adjudicator to record a finding on the facts. However, from the records and arguments advanced by both sides, we find that the facts relevant to decide the issue of jurisdiction, now raised before this forum, are not in dispute and available on record. In these circumstances, we are of the opinion that it is prudent to decide the said issue, instead of remanding it, to the lower authority for determination.
5.3 Undisputedly, the services were rendered by the appellant from their various branch offices/locations other than Kolkata, pursuant to the contracts entered by the said offices with the clients, and also corresponding invoices were raised and payments received from the clients at the respective locations. However, service tax Registration was not obtained at the said locations.
5.4 Now, looking in to the provisions, we find, by virtue of Rule 3 of the Service Tax Rules,1994, the Commissioner of Service Tax at Kolkata, has been empowered to administer the Finance Act,1994 and the Rules made there under, on all assesses situated within the local limit of Kolkata as prescribed. The procedure for Registration for payment of service tax had been prescribed under Rule 4 of the Service Tax Rules,1994. At the relevant time, it was stipulated under Rule 4(1) of the Service Tax Rules,1994 that a person liable to pay service tax should make an application to the jurisdictional officer within thirty days from levy of service tax under Sec.66 of the Finance Act,1994 or commencement of the service, as the case may be. In the case of assesses who provide services from their offices located outside Kolkata and opt for registration in Kolkata for having centralized billing system or Centralized Accounting System, the Commissioner may allow centralized registration to such assesses in view of Sub Rule(2) & Sub Rule (3A) of Rule 4 of the Service Tax Rules,1994, as the case may be, and accordingly the compliance of all the formalities, namely, payment of service tax, availing of Credit, filing of Returns etc., could be carried out at the said location instead through respective branch offices.
5.5 The contention of the Appellant is that since they had neither exercised option for centralized Registration during the period 01.09.1999 to 31.03.2004 nor having either centralized billing or Centralized accounting at Kolkata, except preparation of consolidated profit & Loss account at their Registered office at Kolkata, from the trial balance prepared at the branch offices/locations, hence, the Commissioner, Service Tax, Kolkata does not have jurisdiction to adjudicate and confirm service tax for the services rendered from their branch office and payments received at those locations. We find that investigation was initiated on the basis of specific intelligence collected by the officers of DGCEI, Jamshedpur that the appellant though engaged in rendering the services of clearing and forwarding agent from its branch offices and payments were received from respective clients but neither registered with the Department nor paid any service tax. Necessary data relevant to the services rendered by the Appellant, were collected from their Registered office at Kolkata and the concerned person was also interrogated by the officers of DGCEI during the course of investigation. The Appellant furnished the necessary data from time to time as per the direction of the said officers. In these circumstances, we do not find merit in the argument of the Ld. Sr. Advocate for the Appellant that the Commissioner would assume jurisdiction only when they exercise option for centralized Registration, on account of either having centralized billing system or centralized accounting system, in adjudicating the allegation of non-payment of service Tax on the gross taxable value of the services received and recorded in their consolidated profit & Loss account, prepared at the Head office at Kolkata. As per Section 66 of the Finance Act,1994 service tax is chargeable on the value of taxable service received by the assesseee and the appellants registered office being at Kolkata and their profit and loss account and balance sheet had been accordingly, prepared at the Kolkata office, on the inputs received in the form of Trial balances from the respective branch offices, as per the provisions of Companies Act, hence, there cannot be any doubt that there has been a centralized accounting system at Kolkata. Thus, we are of the opinion that that the Commissioner has jurisdiction to decide the issue of non payment of service tax on the taxable value received by the Appellant for the services rendered through various branch offices and the value of such services duly accounted for, finally in their consolidated Balance Sheet and Profit & loss account, prepared at Kolkata. Needless to mention, Sub Rule(2) & Sub Rule (3A) of Rule 4 of the Service Tax Rules,1994 had been designed for the convenience of the Tax payers and for easy administration of the Finance Act,1994 and in particular to avoid overlapping of jurisdiction and conflicting views in assessment of service tax of the same assesses rendering services from different locations.
5.6 The next argument, on merits, advanced by the Ld. Sr. advocate Shri Poddar, is that the bundle of services that had been rendered by the Appellant to various Electricity Boards, Cement companies, etc. in accordance with the agreements entered with each of these clients, do not fall under the category of clearing and forwarding agent, during the relevant period i.e. from 01.09.1999 to 31.03.2004, as was defined under Section 65 (25) of the Finance Act and the taxable service defined under Section 65 (105)(j) of Chapter V of the Finance Act,1994.
5.7 In the Show Cause Cum Demand Notice, the agreements between appellant and the respective clients have been referred and from the said agreements, the services commonly rendered to these clients viz. Electricity Boards, Cement companies, etc. have been summarized as:
i) To undertake all the paper works and liaison work in connection with coal linkages determination of quantity, Grade and source entitlement by Coal India Ltd. and/or its subsidiaries (hereinafter referred as the Coal companies for brevity);
ii) To file program in time with the Coal companies for issue of consent;
iii) to make all the efforts to be first in queue to avoid lapse of the programmed quantity;
iv) To submit the Coal companies consented programs to the Railways for sanction of programs;
v) To follow up with the Railways for allotment of wagons against sanctioned programs and try to avoid the long gap in the allotment of wagons. As soon as the wagons are allotted by Railways, the Principals are informed accordingly;
vi) To liaison with Railways Authorities for placement of wagons at the colliery siding for loading of coal and co-ordinate with the Local Railway yards for supply of inspected wagons to avoid or minimize the Railway claims on account of detachment of wagons during transit;
vii) To supervise coal loading and to ensure dispatch of quality coal, as far as possible. In case of quality complaint KCT have to take up the matter suitably with the respective authority of Coal Companies for necessary corrective steps;
viii) To supervise the weighment of each and every wagon at the weighbridge and to take all corrective steps to ensure the quantity of the coal;
ix) To undertake all such other Acts/works to ensure proper planning and movement of coal rakes as per the requirements of their Principals;
x) To monitor the movement of loaded wagons/rakes;
xi) To do all the liaison job on behalf of their Principals including the refund/claims till the claims are settled with the Coal Companies/Railways;
xii) To keep regular monitoring and building up an information system to ensure better coal management. Regular report to be submitted to their Principals;
xiii) To plan the movement of coal in advance as per the requirements of their Principals keeping in view of the trends of wagon availability.
5.8 The Ld. Sr. Advocate for the Appellant during the course of his argument has also described the list of services rendered by the Appellant to their clients which, we find, are more or less similar to the above services. Only, in the case of Tamil Nadu Electricity Board (TNEB), it is submitted that the services rendered by the Appellant at Paradip port, were marginally different which involved handling of coal by way of loading and unloading, intra-port transportation, stevedoring, shore handling etc..
5.9 Before ascertaining whether these services would fall under the category of clearing and forwarding Agent, it is necessary to refer to the statutory definition prescribed in the Finance Act,1994 and as was in force during the material period. It was defined at Sec.65(25) of the Finance Act,1994 as:
Clearing and Forwarding Agent means any person who is engaged in providing any service, either directly or indirectly, connected with the clearing and forwarding operations in any manner to any other person and includes a consignment agent.
5.10. The taxable service relating clearing and forwarding Agent was laid down at Sec.65(105)(j) as:
taxable service means any service provided- to a client, by a clearing and forwarding agent in relation to clearing and forwarding operations, in any manner 5.11 The Ld. Sr. advocate Shri Poddar vehemently argued that the services, rendered by the Appellant, neither in any manner satisfy the dictionary meaning of clearing, Clearing Agent, Forward, Forwarder and Forward Agent, nor it conforms to the meaning and scope of services rendered by a clearing and Forwarding Agent as has been explained by the department, through its various Circulars issued since 1997, hence, could not fall under the definition of clearing and forwarding agent as prescribed at Sec.65(25) of the Finance Act,1994. In other words, it is his submission that the meaning of the expression Clearing & Forwarding Agent, under the Finance Act,1994, be construed strictly and its scope be limited to the services rendered by a person involving both clearing services and forwarding services, as understood in common parlance.
5.12 The Ld Sr. Adv. Shri Roychowdhary for the Revenue, on the other hand, submitted that the meaning of the said expression cannot be restricted or narrowed down as the intention of the legislature was to provide a wider meaning to the expression clearing & forwarding agent, defined under the Finance Act, which is apparent from the use of the words directly, indirectly, connected with any manner, etc..
5.13 On a simple reading of the definition of clearing and Forwarding Agent at Section 65(25) of the Finance Act, it is clear that the same consists of following ingredients, namely:
i) Any person who is engaged in providing any service;
ii) either directly or indirectly;
iii) connected with the clearing and forwarding operations, in any manner;
iv) to any other person; and
v) includes a consignment agent.
5.14 Undisputedly, the Appellant are engaged in providing various services under contracts/agreements with their clients viz. the Electricity Boards, cement companies, etc., for movement of the coal from the collieries to the premises of their clients. We find that it is not the claim of either side that the Appellant acts as consignment Agent to their principals, hence, fall under the inclusive part of the aforesaid definition. But, the nerve chord of the dispute lies on the fact that whether the bundle of services provided by the Appellant, to its clients, for movement of the coal, are connected with clearing and forwarding operations. To answer this, it is necessary to understand the width and amplitude of the expression clearing and forwarding operations.
5.15 The expression clearing and forwarding operations has not been defined under the Finance Act,1994, nor its meaning has also been mentioned, as such, in the popular dictionaries referred by both the sides. The Ld. Adv. for the Appellant has made an attempt to explain the scope of the said expression by resorting to the meaning of each of the term, viz. clear, clearing agent, forwarding agent, forwarder etc.. The ordinary dictionary meaning of clear has different shades of meaning used in different context. Referring to its meaning in The Random House Compact Unabridged Dictionary, the Ld. Adv. submitted that the activity of clearing involves freeing of ship or cargo. It is his submission that in the present case, by a contract of sale, the cargo(coal) move from the coal mining companies to the premises of power houses, Cement Companies as the coal companies are responsible for loading of the cargoes into the Railways wagons; the destination of the cargo(coal) were predetermined and there had been no occasion for the Appellant to clear the coal at any stage and hence they cannot be described as clearing agent.
5.16 Similarly, quoting the meaning of forward from the Blacks Law dictionary,(Fifth Edition) which means:to send forward; to send towards the place of destination, to transmit. To ship goods by common carrier , and Forwarding Agent from various dictionaries, including, The Concise Commercial Dictionary by P.G. Osborn & S.T. Grandage: An Agent who attends to the collection, forwarding and delivery of goods; The Compact edition of the Oxford English Dictionary: One whose business is receiving and shipment or transmission of goods, the Ld. Sr. Adv. submitted that a forwarding Agent has to dispatch goods strictly in accordance with the instructions of its principal. It is his contention that in the present case the destinations of delivery of coals have been fixed and known in advance both to the buyer and seller of the coal, the railway rakes were accordingly placed for the said destinations and hence there had been no occasion for their principals i.e. power houses, cement companies to instruct the Appellant about the destinations for the delivery of coal; besides, at no point of time the Appellant took over the custody /possession of the coal, hence, the activities carried out by the Appellant, do not match with services rendered by a forwarding agent. Further, it is his argument that the list of activities normally carried out by a clearing & forwarding Agent as mentioned in the Circulars issued by the Mumbai Commissionerate and by the CBEC from time to time , had also not been carried out by the Appellant, and accordingly, the services rendered by the Appellant fall outside the scope of the definition of clearing & forwarding Agent.
5.17 The argument of the Revenue, on the other hand is that the evidences show that approval, consent or permissions are required before coal could be loaded and allowed to be transported; clearances from the Railways in the allotment of wagons for carrying coal are also required to be obtained; only the correct size and quality of coal to be loaded for movement from the collieries to the respective Electricity Boards and Cement Companies and thus all these activities and services rendered by the Appellant are definitely directly or indirectly and in any manner connected with clearing and forwarding operations, hence, the Appellant fall within the definition of clearing and forwarding agent.
5.18 For the present purpose, suffice it would be, if the activities and services rendered by the Appellant, are shown to have been connected with the clearing and forwarding operations, then, it would fall within the scope of the definition clearing and forwarding agent prescribed at Section 65(25) of Finance Act,1994 and chargeable to service tax as other ingredients of the said definition are admittedly satisfied in the instant case.
5.19 The Coal produced in the collieries are sold to and purchased by the respective Electricity Boards, Cement Companies for their own use. The Appellant had no role in the said purchase and sale of the coal. The Appellant had been appointed under agreement by these electricity Boards, to supervise and involve in the movement of the allotted quantity and quality of the coal from these collieries to their premises for its consumption. The entire gamut of services listed above, rendered by the Appellant, are meticulously designed and agreed by the parties to the agreement that the required quality and quantity of coal produced by collieries, allotted by the coal linkage committee and sold to the Electricity Boards, Cement Companies, etc. be moved from the collieries to the place of its consumption, without interruption and delay. The remuneration for such movement is fixed in accordance with the quantity of coal received by the principals at the place of its consumption and the Appellant are responsible for the receipt of the allotted quantity and quality of the coal at the premises of their clients. It is not the service of mere loading of the coal in railway wagons by the collieries and its automatic onward movement to the pre-determined destination for consumption, but, the Appellant are required to ascertain the correct quality and quantity of coal through strict supervision before or at the time of its loading in the railway wagons, which indicates that they have the requisite authority as an agent for their principal, to receive only the agreed quality of coal and reject the coal which are not conforming to the specifications sold by the collieries to their principals. No doubt after the coal were loaded in the wagons, the same move to the destinations already fixed, but all related services till the coal reaches its destination were rendered by the Appellant. Thus, we find force in the argument advanced by Shri Roy Chowdhary, Ld. Adv. for Revenue that the services rendered by the Appellant are connected with clearing and forwarding operations.
5.20 From the meaning and scope of Forwarding Agent, as per Halsburys Laws England(Fourth Edn.-Vol V),(referred to by the Appellant in their Grounds of Appeal) in forwarding the goods, a forwarding agent need not always take possession of the goods, he acts as an agent for movement of the goods. It reads as:
A forwarding agent is one who carries on the business of arranging for the carriage of goods for other people. It must be clearly understood that a forwarding agent is not, in general, a carrier; he does not obtain possession of the goods; and he does not undertake the delivery of them at the other end. All that he does is to act as an agent for the owner of the goods to make arrangements with the people who do carry such a ship owners, road halters, railway authorities and air carriers, and to make arrangements, so far as they are necessary, for the intermediate steps between the ship and the rail, the customs or anything else.
Although there is a clear distinction between a forwarding agent and a carrier, the same person may carry on both activities at once and contract sometime as one and sometimes as the other. The fact that a person describes himself as a forwarding agent is not conclusive and it is a question of fact to be decided according to the circumstances of each case whether a person normally carrying on business as a forwarding agent contracts solely as agent so as to establish a direct contractual link between his customer and a carrier (or possibly with several carriers, each undertaking a different part of transit) or whether he contracts as Principal to carry the goods, the customer appreciating that he will perform the contract vicariously through the employment of sub-contractors. The nature of the carriage, the language used by the parties in describing the role of the person concerned and any course of dealing between the parties will be relevant factors.
Persons properly described as shipping and forwarding agents frequently act as carriers themselves with respect to part of the carriage, for example, by performing collection and delivery services between the customers premises, their own depots and warehouses, docks and carriers depots. In such cases, they would have the rights and duties of carriers with respect to such carriage as they undertake personally, but the rights and duties of forwarding agent with respect to the remainder of the transit. 5.21 We find that this Tribunal in Coal Handlers case(supra), scrutinizing services of identical nature, concluded that these services fall under the definition of Clearing and Forwarding Agent. It is recorded as:
5.The appellants have agreed that the issue involved stands decided in the case of Prabhat Zarda Factory (India) Ltd. (supra). The Tribunal under the said judgment has observed that as per definition of clearing and forwarding agent, he is a person who is engaged for providing any service, either directly or indirectly connected with clearing and forwarding operations in any manner to any other person and includes a commission agent. The use of the expression any and indirectly in the said definition of clearing and forwarding agent, is indicative of the fact that the scope of the services to be provided by clearing and forwarding agent is quite wide. He is not only the person who is actually dealing with the goods, which has to be termed as clearing and forwarding agent, but even if the services are indirect and if the same are connected with the clearing and forwarding operations in any manner of the other persons, he would be covered within the scope of the said definition. The appellants in the instant case render their services in all the sections of pre load of the coal rakes i.e. obtaining consent on behalf of their customers, sanctions from the office of Executive Director - Rail Movement, supervising loading of the wagons, sending samples and assuring the proper quality and quantities, complying with the formalities relating to payments for freight. As such, it is quite clear that the appellant is covered by the definition of clearing and forwarding agent, as interpreted by the Tribunal in the above referred case of Prabhat Zarda. 5.22 The Ld. Advocate Shri Poddar has submitted that the principle laid down in Coal Handlers case(supra) cannot be relied upon as the said judgement was based on the principle laid down by the Tribunal in Prabhat Zarda Factorys case, which has been specifically over-ruled by the larger Bench of the Tribunal in Larsen & Toubros case(supra). On the other hand, the Ld.Advocate for the Revenue has submitted that the larger Bench of the Tribunal had disagreed with the conclusion arrived at by the Tribunal in Prabhat Zardas case, but approved the principle laid down therein.
5.23 We have carefully considered these judgements. In Prabhat Zardas case, the facts of the case was that M/s.Prabhat Zarda had by an agreement dated 25.10.1989 with M/s.Ratna Zarda Company(RZC) appointed RZC as an agent for the purpose marketing their product and for booking of orders, managing, supervising and developing the market. After analyzing the scope of the definition of clearing and forwarding agent, this Tribunal had concluded that M/s.Ratna Zarda Company is a clearing and forwarding agent of M/s.Prabhat Zarda Factory. The matter was referred to larger Bench in Larsen & Toubro Ltd. case. After analyzing the relevant provisions, the larger Bench of Tribunal has laid down the principle at para 10 as follows:-
10.?It appears to us that the expressions directly or indirectly and in any manner occurring in the definition of clearing and forwarding agent cannot be isolated from the activity of clearing and forwarding operations. A person may undertake to provide service of procurement of orders as agent of the principal without agreeing to provide services of clearing and forwarding of the goods. Clearing and forwarding has a very specific connotation in the context of movement of goods from the supplier to their destination and agents undertaking clearing and forwarding operations may never have been concerned with procurement of orders for the goods which are cleared and forwarded. A person entrusted with the work of commission agent for procuring orders for the principal cannot insist on also providing services as clearing and forwarding agent in respect of those goods and it would be open for the principal to engage some other person for the purpose of forwarding such goods. In cases where the buyer is under an obligation to take delivery of the goods from the vendors premises, there would not be even any need on the part of the vendor to engage any forwarding agent, nor can a person engaged for the purpose of clearing and forwarding operations, insist on procuring orders for the principal in the absence of any stipulation to that effect. 5.24 The ratio of the said judgment is that use of expression like directly or indirectly, and in any manner in the definition of clearing and forwarding agent cannot be construed an activity unconnected with clearing and forwarding operations. Applying the said principle, to the facts of the case, it was concluded that mere procuring of booking orders for the principal by an agent on payment of commission basis would not amount to provide services as clearing and forwarding agent within the meaning of the definition of that expression under Section 65(25) of the Finance Act, 1994. Consequently, the decision of Prabhat Zarda Factory (P) Ltd. was over-ruled to that extent. At para 11 of the said judgment it is observed as:
11.?We, therefore, hold that mere procuring or booking orders for the principal by an agent on payment of commission basis would not amount to providing services as clearing and forwarding agent, within the meaning of the definition of that expression under Section 65(25) of the Finance Act, 1994, as has been held in the decision of the Tribunal in Prabhat Zarda Factory (Pvt.) Ltd. v. CCE, Patna reported in 2002 (145) E.L.T. 222 = 2002 (50) RLT 326 (CEGAT-KOL.). The decision in Prabhat Zarda Factory (Pvt.) Ltd. stands overruled to the extent of the aforesaid ratio laid down thereunder. 5.25 We agree with the Ld. Advocate for the department that the facts involved Prabhat Zardas case are definitely different from the instant case. In the said case, the question was whether the services of commission agent appointed for procurement of orders, would fall under the definition of clearing and forwarding agent. Whereas, in the present case, the facts involved were not for procurement of Orders for their principal but services rendered related to movement of correct quantity and quality of coals from various collieries to the power houses, cement companies etc. Therefore, we are of the opinion, that the larger Bench of the Tribunal in Larsen & Toubros case(supra) has though concurred with the width and amplitude of the meaning of directly or indirectly and in any manner, laid down by the Division Bench of the Tribunal in Prabhat Zardas case, but did not agree with the conclusion arrived at by the Bench on the facts in Prabhat Zardas case. Hence, the principle laid down in Prabhat Zardas case and followed later in Coal handlers cannot be faulted with.
5.26 The Ld. Advocate for the Appellant has also placed heavy reliance on the judgement of Honble Punjab & Haryana High Court in the case of CCE, Punchkula vs. Kulcip Medicines Pvt.Ltd.(supra), The facts involved in the said case was that the assessee had entered into an agreement with M/s. Cipla for handling and distribution of their products and were entrusted with the job of receiving, storing and distributing Cipla products to their authorised stockists and distributing centres. For the service so rendered, the assessee was entitled for commission based on agreed percentage of sales figures and also for reimbursement of recurring expenses. We find that facts involved in the said case are entirely different and hence the observation of the Honble High Court in the context of the said case cannot be made applicable to the fact of the present case. Also, we do not feel the necessity of discussing various judgments cited by both sides for the reasons that the facts and circumstances involved in those cases are totally different and have scant relation to the services rendered by the Appellant in the present case. In our view, the facts of the present case, are closely comparable only with the facts of the Coal Handlers case (supra) where this Tribunal has categorically observed that the services rendered for movement of coal from collieries to its place of consumption would come within the definition of clearing and forwarding agent. We also do not find substance in the argument of the Ld. Advocate for the Appellant that to fall with in the definition and scope of clearing & forwarding agent, it is necessary for a person to undertake all the activities/services narrated in the Mumbai Commissionerate Trade Notice. In our view the activities/services mentioned in the said Circular which was based on the Notification issued by the Board bearing F.No.43/7/97-TRU dt.11.07.1997, are only illustrative in nature and not exhaustive, as is clear from the use of the expressions, normally, usually, in the said Notification/Trade Notice. Hence, it is not necessary that to fall under the definition of clearing & Forwarding agent, a person is required to undertake all the listed activities or any of the said activities. By implication, if a person undertakes activities/ renders services, not mentioned in the aforesaid list of services, but satisfies all the ingredients of the definition of Clearing & Forwarding Agent discussed as above, then he would fall within the scope of the said definition. Thus, we have no hesitation to hold that the activities/services rendered by the Appellant to its clients under contracts/agreements for movement of coal from the collieries to the premises of their clients satisfy the definition of Clearing and Forwarding Agent prescribed at Section 65(25) and taxable service under Section 65(105)(j) of the Finance Act,1994.
5.27. The Ld. Adv. for the Appellant submitted that the Ld. Commissioner has erroneously, confirmed the demand on the value of freight financing charges, received against separate contract, from their client M/s GSEB, which according to them cannot be chargeable to service tax as the same cannot fall under the category of Clearing & Forwarding Agent service. We find that the Ld. Commissioner in the impugned order had recorded a finding that the amount received on account of freight financing were part of clearing and forwarding services rendered by the Appellant connected with clearing and forwarding operation of coal. He has also observed that the value for service tax did not include the actual railway freight charged by the Appellant, but on the amount of commission received from such services, hence, its value cannot be excluded from the total demand. On going through the said contract, we find that the services mentioned therein were not of simply making payment for the freight charges, in advance to railways, on behalf of their client, but it also includes services connected with clearing and forwarding operations, rendered to GSEB, hence, in our view the same are chargeable to service tax.
5.28 The next issue needs to be addressed is, whether the demand notice dt. 19.10.2004 issued for the period from 01.09.1999 to 31.03.2004, is barred by limitation. It is the claim of the Appellant that under a bona fide belief and being guided by the Notification issued by Board & Mumbai Commissionerate Trade Notice in the year 1997 that no Service Tax would be payable on the services rendered by them to Electricity Boards, cement companies, etc., accordingly, neither did they take registration nor paid Service Tax under the category of clearing and forwarding agent w.e.f. 01.09.1999 to 31.03.2004. The contention of the Revenue, on the other hand, is that the Appellant had not disclosed and/or suppressed the material documents specially the contracts between them and power houses willfully to avoid payment of service Tax on the services of clearing & forwarding agent rendered by them. Further, it is submitted that the list of services mentioned in the Boards Circular No.B.43/7/1997-TRU dt.11.07.1997 were the examples of services rendered by a clearing & forwarding agent, and were not exclusive of other action and job which would amount to rendering of Taxable service by a clearing & forwarding agent within the definition of Sec.65(25) of Finance Act,1994. Both sides placed reliance on the judgments of Honble Supreme Court in Chemphar Drugs and Cosmic Dye Chemicals case(supra) besides other judgments referred by each of them.
5.29. The relevant provision dealing with recovery of service tax, not levied, short levied, not paid or short paid etc. at the relevant time reads as:
SECTION [73.?Recovery of service tax not levied or paid or short-levied or short-paid or erroneously refunded. (1) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the Asst. Commissioner of Central Excise or, as the case may be, the Deputy Commissioner of Central Excise may, within one year from the relevant date, serve notice on the person chargeable with the service tax which has not been levied or paid or which has been short-levied or short-paid or the person to whom such tax refund has erroneously been made, requiring him to show cause why he should not pay the amount specified in the notice :
Provided that where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded by reason of
(a) fraud; or
(b) collusion; or
(c) wilful mis-statement; or
(d) suppression of facts; or
(e) contravention of any of the provisions of this Chapter or of the rules made thereunder with intent to evade payment of service tax, by the person chargeable with the service tax or his agent, the provisions of this sub-section shall have effect, as if, for the words one year, the words five years had been substituted.
Explanation. Where the service of the notice is stayed by an order of a court, the period of such stay shall be excluded in computing the aforesaid period of [eighteen months] or five years, as the case may be, 5.30 The provision for recovery of service tax , in the aforesaid form had been brought into force w.e.f 10.09.2004. In the earlier provision, it was provided that if by reason of omission or failure on the part of an assessee , to make a return under Sec.70 or to disclose wholly or truly all material facts required for verification of the assessment under Section 71, the value of taxable service has escaped assessment or has been under assessed or service tax has not paid or has been short paid etc., the period for recovery was prescribed as five years. Other than the above cases, the period of recovery was specified as one year. The changes brought into the said provision, after amendment, has been significant in the sense that for invoking five years period, the act of omission or failure, have been replaced with acts like fraud or collusion or willful mis-statement or suppression of facts or contravention of any of the provisions or of the rules made there under, with intent to evade payment of service tax. In other words, the recovery provision under service tax has been aligned with that of Central Excise Act. Hence, the principles of law laid on the said subject, under central excise laws, would be relevant for the present purpose.
5.31 The Hon ble Supreme Court in the case of Collector of Central Excise Vs. HMM Ltd. 1995 (76) ELT 497(SC) observed that mere non-declaration of waste generated, in the classification list, would not result into an inference, in a routine manner that it was due to mis-statement or suppression etc.. The department is required to disclose the facts in the Show cause Notice for reaching such an inference of willful mis-statement, suppression of facts etc. against the assessee. Their Lordships observed as:
The mere non-declaration of the waste/by-product in their classification list cannot establish any wilful withholding of vital information for the purpose of evasion of excise duty due on the said product. There could be, counsel contended, bona fide belief on the part of the assessee that the said waste or by-product did not attract excise duty and hence it may not have been included in their classification list. But that per se cannot go to prove that there was the intention to evade payment of duty or that the assessee was guilty of fraud, collusion, mis-conduct or suppression to attract the proviso to Section 11A(1) of the Act. There is considerable force in this contention. If the Department proposes to invoke the proviso to Section 11A(1), the show cause notice must put the assessee to notice which of the various commissions or omissions stated in the proviso is committed to extend the period from six months to 5 years. Unless the assessee is put to notice, the assessee would have no opportunity to meet the case of the department. The defaults enumerated in the proviso to the said sub-section are more than one and if the excise department places reliance on the proviso it must be specifically stated in the show cause notice which is the allegation against the assessee falling within the four corners of the said proviso. In the instant case that having not been specifically stated the Additional Collector was not justified in inferring (merely because the assessee had failed to make a declaration in regard to waste or by-product) an intention to evade the payment of duty. The Additional Collector did not specifically deal with this contention of the assessee but merely drew the inference that since the classification list did not make any mention in regard to this waste product it could be inferred that the assessee had apparently tried to evade the payment of excise duty.
5.32 In the present case, while invoking the extended period of limitation it is alleged that the Appellant had willfully suppressed the facts and did not take proper action for payment of proper service tax under the category of C & F Agent. It is charged that they had willfully attempted in the manner stated in the notice with intent to evade payment of service tax right from the very beginning on the taxable service under the category of C & F Agents rendered by them to their principals by way of willful misstatement , by way of omission and failure, by way of suppression and non-disclosure of material facts and contraventions of the provisions of Chapter V of The Finance Act,1994 and service tax Rules made there under. We find that these allegations were confirmed by the Ld. Commissioner verbatim without recording any reasons in the impugned Order.
5.33 The principle for invoking extended period of limitation as prescribed under Section 11A(1) of the Central Excise Act,1944 laid down by the Honble Supreme Court in Chemphar Drugs case (supra) extensively referred in almost all cases involving the issue extended period of limitation, reads as under:
8. ..In order to make the demand for duty sustainable beyond a period of six months and up to a period of 5 years in view of the proviso to sub-section 11A of the Act, it has to be established that the duty of excise has not been levied or paid or short-levied or short-paid, or erroneously refunded by reasons of either fraud or collusion or wilful misstatement or suppression of facts or contravention of any provision of the Act or Rules made thereunder, with intent to evade payment of duty. Something positive other than mere inaction or failure on the part of the manufacturer or producer or conscious or deliberate withholding of information when the manufacturer knew otherwise, is required before it is saddled with any liability, beyond the period of six months. Whether in a particular set of facts and circumstances there was any fraud or collusion or wilful misstatement or suppression or contravention of any provision of any Act, is a question of fact depending upon the facts and circumstances of a particular case.. 5.34 In Cosmic Dye Chemicals case (Supra) their Lordships had observed as:
5.The main limb of Section 11A provides limitation? of six months. In cases, where the duty is not levied or paid or short-levied or short-paid or erroneously refunded, it can be recovered by the appropriate officer within six months from the relevant date. (The expression `relevant date is defined in the Section itself). But the said period of six months gets extended to five years where such non-levy, short levy, etc., is by reason of fraud, collusion or any wilful mis-statement or suppression of facts or contravention of any of the provisions of this Act or of the rules with intent to evade payment of duty......
6.Now so far as fraud and collusion are concerned,? it is evident that the requisite intent, i.e., intent to evade duty is built into these very words. So far as mis-statement or suppression of facts are concerned, they are clearly qualified by the word wilful preceding the words mis-statement or suppression of facts which means with intent to evade duty. The next set of words contravention of any of the provisions of this Act or Rules are again qualified by the immediately following words with intent to evade payment of duty. It is, therefore, not correct to say that there can be a suppression or mis-statement of fact, which is not wilful and yet constitutes a permissible ground for the purpose of the proviso to Section 11A. Mis-statement or suppression of fact must be wilful. 5.35 In a recent case, namely, Uniworth Textiles Ltd. Vs. Commissioner of Central Excise, Raipur 2013 (288) ELT161(SC), the Honbe Supreme Court distinguishing between mere default for which normal period of limitation is attracted and the circumstance for invoking extended period had observed as:
12. We have heard both sides, Mr. R.P. Bhatt, learned senior counsel, appearing on behalf of the appellant, and Mr. Mukul Gupta, learned senior counsel appearing on behalf of the Revenue. We are not convinced by the reasoning of the Tribunal. The conclusion that mere non-payment of duties is equivalent to collusion or willful misstatement or suppression of facts is, in our opinion, untenable. If that were to be true, we fail to understand which form of non-payment would amount to ordinary default? Construing mere non-payment as any of the three categories contemplated by the proviso would leave no situation for which, a limitation period of six months may apply. In our opinion, the main body of the Section, in fact, contemplates ordinary default in payment of duties and leaves cases of collusion or willful misstatement or suppression of facts, a smaller, specific and more serious niche, to the proviso. Therefore, something more must be shown to construe the acts of the appellant as fit for the applicability of the proviso. 5.36 Further elucidating the meaning of willful, their Lordships in the above case have observed as:
22. We are not persuaded to agree that this observation by the Commissioner, unfounded on any material fact or evidence, points to a finding of collusion or suppression or misstatement. The use of the word willful introduces a mental element and hence, requires looking into the mind of the appellant by gauging its actions, which is an indication of ones state of mind. Blacks Law Dictionary, Sixth Edition (pp 1599) defines willful in the following manner: -
Willful. Proceeding from a conscious motion of the will; voluntary; knowingly; deliberate. Intending the result which actually comes to pass An act or omission is willfully done, if done voluntarily and intentionally and with the specific intent to do something the law forbids, or with the specific intent to fail to do something the law requires to be done 5.37 From the above meaning of willful, it is clear that mere inaction is not sufficient, but some positive action, with intent to evade payment of tax, should be present for invoking extended period of limitation. Further, we do not agree with the contention of the Ld. Advocate for the Revenue that it is for the Appellant to show their bonafide in not discharging the service tax during the said period. On the contrary, when extended period is invoked, alleging willful mis-statement, suppression of fact etc., the burden is on the Revenue to substantiate the same through material particulars, as has been held by the Honble Apex Court, in the aforesaid case, in the following words:
24. Further, we are not convinced with the finding of the Tribunal which placed the onus of providing evidence in support of bona fide conduct, by observing that the appellants had not brought anything on record to prove their claim of bona fide conduct, on the appellant. It is a cardinal postulate of law that the burden of proving any form of mala fide lies on the shoulders of the one alleging it. This Court observed in Union of India Vs. Ashok Kumar & Ors.((2005) 8 SCC 760) that it cannot be overlooked that burden of establishing mala fides is very heavy on the person who alleges it. The allegations of mala fides are often more easily made than proved, and the very seriousness of such allegations demand proof of a high order of credibility. 5.38 Now, reverting to the facts of present case, we find that no specific evidence nor any reasoning in support of the conclusion of willful suppression of facts with intent to evade payment of service tax has been recorded in the impugned Order by the Ld. Commissioner. However, in the Show Cause Notice, analyzing the statement of one Shri Kalyan Banerjee, General Manager of the Appellant, it has been alleged that right steps were not taken by him to pay the service tax on the services rendered by the principals, which clearly indicates negligence on the part of Shri Banaerjee to comply with the law. We do not find merit in the said allegation of negligence in payment of service tax, could result in willful mis-statement or suppression of facts, thus, warranting invitation of extended period of limitation. On the other hand, we find force in the argument of Ld. Advocate for the Appellant for harbouring a bonafide belief for non-payment of service tax on the services rendered by them to their clients. It is contended that the principal reason for such a belief has been due the Notification of CBEC dt.11.07.1997 and subsequent Mumbai Commisisonerate Trade Notice, which have been accepted by the judiciary, even though in the context of other services, but, while interpreting the scope of C&F Agent under the Finance Act,1994. We find, it may be correct to say that the said Circulars listed few activities of C& F agent, which may not be exhaustive, but apparently, it gives an impression that to fall under the category of C& F agent, such services were to be carried out. The Appellant had challenged the CBEC letter F.No. 159/1/2003-CX-4 dt.10.12.2003 in the Bombay High Court, where Coal Merchants were stated to be C& F agents, as they did not accept the same. Also, we notice that the services had been rendered to various Electricity Boards, Cement Companies under contracts/agreements and payments received from these services were duly recorded at every stage and finally in their Balance Sheet of the respective years. We do not find force in the argument of Ld. Adv. for the revenue that an attempt had been made to suppress the real nature of job by employing the expressions like, liaison, coordination ,material linkage etc. in the Contracts/agreements with their clients. Hence, all these factors cumulatively, lead to an inference that the conduct of the Appellant had been bonafide. In our view, the extended period of limitation prescribed under Section 73(1) of the Finance Act,1994 cannot be invoked in the present case. However, we find that the demand had been issued on 19.10.2004 for the period 01.09.1999 to 31.03.2004 and a part of demand may fall within normal period of limitation. This aspect needs examination by the Adjudicating authority.
5.39 Ld. Advocate contended that the computation of demand was incorrect in as much as the value received in connection with the contract with Tamil Nadu Electricity Board has also been included in the demand. The Ld. Commissioner has not accepted the argument of the Appellant on the ground that the necessary evidences were not produced before him. The Ld. Advocate categorically made a submission that all evidences relating to the services rendered against the said contract were produced before the department. In these circumstances, we are of the opinion that the matter be remitted to the Commissioner for re-examination of the evidences in this regard and come to a finding, accordingly. Similarly, it is also the plea of the Appellant that the services rendered to M.S.E.B. against contract dated 03.10.2003 has already been subject matter of dispute between the Department and the Appellant. The show cause notice was issued for recovery of the said Service Tax by the Nagpur Commissionerate and the matter is sub judice before the CESTAT Mumbai. The Ld. Commissioner has also rejected the contention of the Appellant on the ground that necessary evidences were not produced before him by the Appellant. The Appellant had enclosed evidences in support of their contention in the Appeal filed before this Tribunal. Consequently, this issue also needs re-examination by the Ld. Commissioner in the light of the evidences produced.
Consequently, we set aside the impugned Order and remit the case to the Ld. Commissioner, Service Tax, Kolkata for recalculation of the demand, if any, applying the normal period of limitation prescribed under Section 73(1) of the Finance Act,1994, as was in force at the material time. Also, while calculating the demand, the Ld. Commissioner would take into consideration the evidences produced by the Appellant and record a specific finding on the aspect of includability or otherwise of the value of taxable service received against Contracts, with TNSEB & MSEB, in the total demand. Penalty and/or interest, if any, be determined, accordingly. Needless to say, Principles of natural justice be observed.
The Appeal is disposed of on the above terms.
(Pronounced in the open Court 02.04.2013.)
SD/ SD/
( S. K. GAULE ) ( DR. D. M. MISRA )
TECHNICAL MEMBER JUDICIAL MEMBER
sm
S.Tax Appeal No.30/2007
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