Custom, Excise & Service Tax Tribunal
Commissioner Of Customs &Central ... vs M/S. Nicholas Piramal India Ltd on 25 September, 2008
IN THE CUSTOMS, EXCISE AND SERVICE TAX
APPELLATE TRIBUNAL, NEW DELHI
PRINCIPAL BENCH, COURT NO. I
Customs Appeal No. 525 & 549/2006
[Arising out of Order-in-Original No. 25-Commr/ST/IND/2006 dated 20.7.2006 passed by Commissioner, Customs & Central Excise, Indore (MP)]
For approval and signature:
Hon'ble Mr. Justice S.N. Jha, President
Hon'ble Mr. M. Veeraiyan, Member (Technical)
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 Their Lordships wish to see the fair :
copy of the Order?
4. Whether Order is to be circulated to the :
Departmental authorities?
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Commissioner of Customs &Central Excise Appellant
Indore
Vs.
M/s. Nicholas Piramal India Ltd. Respondent
AND
M/s. Nicholas Piramal India Ltd Appellant
Vs.
Commissioner of Customs & Central Excise Respondent
Indore
Appearance: Mr. Vijay Kumar, DR for the Department
Mr. A.R.Madhav Rao, Advocate for the assessee-respondent
CORAM:
Hon'ble Mr. Justice S.N. Jha, President
Hon'ble Mr. M. Veeraiyan, Member (Technical)
Date of Hearing : 25.9.2008
ORDER NO . ________________________
Per M. Veeraiyan (for the Bench):
Appeal No. ST/525/2006 is by the department against the order of the Commissioner No. 25-Commr/ST/IND/2006 dated 20.7.2006. Appeal No. 549/2006 is by the party against the very same order against the portion of the order by which a sum of Rs.2,51,223/- was confirmed against them with equal penalty.
2. Heard both sides.
3. Relevant facts, in brief, are as follows:-
(a) The party received management consultancy services from eight foreign consultants/firms and two of them had office in India. The service was received during the period prior to 1.1.05. Commissioner by his order dated 20.7.06 dropped the demand in so far as it relate to three firms who had not authorised the party to pay the service tax in terms of contract; he dropped the demand in respect of two parties on the ground that they had office in India and in respect of three other parties, in the absence of any agreement produced by the parties, he inferred that party was authorised to pay service tax and accordingly confirmed the demand.
(b) The Department is in appeal in respect of demands dropped and parties in respect of demands confirmed against them.
4. Learned DR submits that the services received by them were taxable during the relevant period and dropping of the demand was not justified.
5. Learned advocate appearing for the party submits that in all these cases, services have been received from foreign firm /persons during the period prior to 1.1.05 and in the light of decisions of Larger Bench in the case of Hinustan Zinc Ltd. [2008 (11) STR 328], no service tax can be demanded from the recipient of service. As regards demand relating to three parties which has been confirmed against them, he submits that the inference of the Commissioner that in the absence of agreement the party was authorise to pay service tax is erroneous. Even otherwise, the tax liability due to the Government cannot be determined by contract as intra vicious one to private parties. In this regard, he relies on the decision of the Tribunal vide Final Order No. ST/208/08 dated 6.8.08 in the case of M/s. JCB India Ltd. He also relies on the decision of the Honble Supreme Court in the case of Deputy Commercial Tax Officer vs. Sha Sukraj Peerajee [1968 (21) STC 5] thereunder it has been held as follows:-
....But even on the assumption that the respondent undertook to pay the arrears of sales tax due by the transferor, it does not follow that there is a liability created inter se between the State Government on the one hand and the transferee on the other hand.
6. In the light of the above, following the decision of the Larger Bench in the case of Hindustan Zinc cited supra, we allow the appeal of the party and reject the appeal of the department.
(Dictated & pronounced in the open Court) ( Justice S.N. Jha ) President ( M. Veeraiyan ) Member(Technical) ss