Karnataka High Court
The Commissioner Of Central Excise vs M/S Mahakoshal Beverages Pvt Ltd on 29 July, 2011
Bench: V.G.Sabhahit, B.Manohar
CEL ALNG 60 IN THE HIGH COURT OF KARNATAKA CIRCUIT BENCH AT DHARWAD DATED THIS THE 297 DAY OF JULY, 2011). PRESENT AND THE HON'BLE MR.JUSTICE B.MANORAR C.E.A.NO. 60/2007 BETWEEN: THE COMMISSIONER OF CENTRAL EXC] ISE, a CUSTOMS, NO.71, CLUB ROAD, Se BELGAUM-S90 001, ty APPELLANT [BY SRLS.C.BHEE MRABDI, ADVOCATE AND: M/S. MAHAI KOSH i. BEY ERAGES PVT LTD., TUDAYERKAR COMPOUND? NEAR GOVT. PRESS, SAD; ANKERE, DHARWAD- 580 007- ; o a . RESPONDENT
-- {BY SRL. LARSHIMIK Ml ARAN, SRI. G. ne ISH.
Hiss CEA FPLED UNDER SECTION 35G OF THE CEN TRAL EXCISE ACT, 1944 ARISING OUT OF THE ORDER DATED 20/11 / 2008. & 19/12/2005 PASSED IN FINAL ORDER 1925 9/2006 &
- ORDER IN ORI IGIONAL NO.1/2005. PRAYING THAT THIS HON'BLE 2 COURT MAY BE PLEASED To.
- ap "TO DECIDE THE SUBSTANTIAL QUESTION OF STATED THEREIN, 2007 CLE LANG 60/201 No
11) SET ASIDE THE FINAL ORDER NQO.19 25/2006 DATED 20/11/2006 PASSED BY THE CESTAT. SOUTH - Zi NAL BENCH AT BANGALORE, VIDE ANNEXURE-B AND 4 te TC:
THIS APPEAL COMING ON FOR FINAL HEARING, THIS DAY. V.G.SABHAHIT.J.. DELIVERED THE POLLOWING:
This appeal is filed by the revenue being aggrieved.
by the order passed bv the Central Excise and Service Tax Appellate Tribunal, South Zone Bench, Bangalore, in Appeal No. Service Tax/27/ 2006, wherein the appeal filed by the assessce has beer allowed ho id ing that in the show cause notice what was _ proposed was to include the eS income towards. management services u/s 73 of the Finance Act. whereas the tinal order is passed treating the Income for which no show cause notice was issued and " therefore the.oi der could not be sustained and allowed the appeai filed. by the assessee.
Zs The material facts leading up to this appeal are as ~ follows:7 CUA LNo 60/2007
es) A show cause notice was issued to the respondent on 28.07.2005 on verification of the records since it was found that the respondent was running a set of taxable .
services viz., Cargo Handling Services, Marketing Services, ° Maintenance or Repair Services, ~ Management Consultancy Services, Advertising Agents, Services, Business Auxilliary Services to. M/s-Nectar-and.had been paid the service charges collectively. -Frimarily, the service provided by M/s.Mahakoshal. shall be.classifiable under Management Consultant.Services; that as per Section 65 A (2) of Fitrance Acty.1694. and therefore show cause notice was issued to the following effect:
"7. Service. Tax amount of Rs. 90,96,501/-
~. (Rupees Ninety Lakhs Ninety Ste Thousand Five Hundred One Only) on the taxable value of Rs. 16,48, 71,884.00 not paid for the period from January 200] to August 2004 and Rs.15,85,394/-(Rupees fifteen lakh eighty five _ thousand three hundred ninety four only) on the "taxable value of Rs.1,55,43,084/- not paid for the period from September 2004 to March 2005 \bys CEL ALNO. 60/2007 as shown in the worksheet enclosed to this show cause notice should not be demanded and recovered from them sub Section(1}(a) of Section: Be 73 of Chapter V of Finance Act, 1994; 7 |
2. Interest on (1) above... should "jot be - demanded and recovered from "them: inden, . Section 75 of Chapter V of Finance-Act, 1994:
3. Penalty should not Be imposed on "them under Section 76. of Chapter cof Finance. Act, 1994 for failure to pay Service tax as above;
4, Penalty should not be "pos mr on them under Section: 77: of. Chapter V . of Finance Act, 1994 for Feailies © to furnish pre: cribed return;
5. Penaity. should not. be imposed on them under Section "78 of Chapter V of Finance Act, 1994 for suppréssing ucilue of taxable service."
3. In-response to the show cause notice, reply was _ given by the respondent contending that the respondent Was' undertaking transportation service and was not "running cany management and consulting services as "proposed in the show cause notice. The original authority DY order dated 19.12.2005 held that in view of explanation Lop CANO .60/2007 offered by the assessee though the income was not assessable under management consultant service, the same was subject to tax on management auxiliary Service and accordingly imposed tax and interest and penalty u/s ; 76, 77 and 78 of the Act. Being aggrieved by the. Sard order, appeal was preferred bythe respondent before the Tribunal contending that the" order-in-original dated 19.12.2005 confirming the sales tax. for the period from 01.07.2003 to Mareh 2005 bas been passed in contrary to the proposal made in. the show cause notice. It was specifically "stated: wn "the sh sw cause notice that the income will be treated as management consultancy service u/s 73 of 'the Finance-'Act, 1994 and the show cause i notice did not contain any proposal to include the income towards menagement and business auxiliary charges and the original authority having accepted the contention of the assessee that the income did not fall within the ambit 'of _ management consultancy service could not have . Imposed service taX on auxiliary charges in respect of \ oy CLA NG. 60/2007 (6:
which no show notice was issued and the said contention was upheld by the Tribunal and the appeal was-allowed and the impugned order-in-original was set 4 side 'by order dated 22.11.2006. Being aggrieved. by the said order, this appeal is filed which is admitted for consideration of the following substantial questions wf law:
"7, Whether the Assessing Authority has got.poiwer to confirm the demends under show-cause notice under different Heading and category than.the.one alleged in the. shote-cctse notice?
2. Whether tiie appellate Fribunal was right in "eoming to the conchision that the ingredients of proviso. to See.73 have not been wivoked in . show-cause notice, when show-cause notice in fact mentioned Sec.73 (I}(a) and narrated all the facts-which are the details of ingredients of = See. 73 (I}(cia} and (e) of the Finance Act, "19642
3. - Whether the Tribunal is justified in holding that mere non-quoting of sub Section of Sec.73 of Finance Act, 1994 in the demand notice can be Loy CE OALNG 60/2007 ~d held to be not invoking the clause under Sec. 73 (1) of the Finance Act, 1994?"
4, Learned counsel for the appellant submitted thar a broader view has to be taken since it is mentioned in che :
show cause notice that the amount 1s chargeable us 73 of the Act where the service fax.is imposed under the head : 'business auxiliary _ service' "and not. management consultantancy service-as proposed. would not make any difference as the respondent has adinittedly not paid tax and however he is liable to pay' the tax and therefore the order af the 'Tribunal is. liable. to be set aside and the question of law 'has te. be answered in favour of the revenue. He also submitted that mere non-quoting of sub mL section would "pot. enable the respondent to take "advantage of the same when imposition of tax 1s relatable to source of treating the income u/s 73 (1) (c}, (d) and (e).
"Su We have carefully considered the contentions urged by the learned counsel for the appellant. It is clear from Loy"
CURLA.NO.60 2007 the perusal of the show cause notice that as culled out above that what was proposed was to impose service. tax amount of Rs.90,96,.501/- u/s 73 (1) (a) of the Finance. Act. In view of the explanation submitted in response to. :
the show cause notice, the original authority held thatthe. tax could not have been leviable under the said Act 'u/s 73 (1) (aj. However, the. original "authority "proceeded to impose the tax under the head "'businéss.auxilliary service' which is taxable a/ s 73. (1) (di and 73 (1}-(e). The fact that there was nc praposai inthe show Cause notice to include the income' as. auxiliary business service is indisputable in view of the. contents of. the show cause notice and therefore inthe absence' of any notice issued to the "respondent in view of the provisions of Section 73, it is clear that impesition of tax and consequently interest and penalty cannot be sustained and the same has been rightly set"aside by the Tribunal. As no order to treat the ~inceme as business auxiliary service had been passed without proposing the same to the respondent in the show wy CLELALNO.60 2007 cause notice, the order passed by the Tribunal is justified and substantial question of law has to be answered against the revenue.
6. The decision relied by the learned counsei.for the appellant is not of any help in the present case as in the ° said case, the Supreme Court 'was considering regarding classification of goods u/s 261 of thie Act.
7. Accordingly, we hold thatthe appeal is devoid of merits. Apveal-is'dismissed..
Sd/-
JUDGE Sd/-
JUDGE JIm -