Customs, Excise and Gold Tribunal - Bangalore
E.V. Mathai And Co. vs Commissioner Of Central Excise on 26 May, 2003
Equivalent citations: 2003(157)ELT101(TRI-BANG), 2006[3]S.T.R.116, [2007]7STT189
ORDER G.A. Brahma Deva, Member (J)
1. These are two appeals filed by the appellants with reference to demand of Service tax under the provisions of Finance Act, 1994.
2. Shri Varadarajan learned Counsel appearing for the appellants submitted that these two appeals are interlinked, whereas in Appeal No. ST/7/2002 duty was demanded by the Department on the ground that the appellants are liable to pay the Service tax on transportation charges and other appeal (ST/8/2002) relates to refund claim on the ground service tax has been paid though not leviable. He said that no Service tax is payable on transportation charges in view of the amendment brought out by the legislation on 2-6-98. He said that there is separate agreement for the services rendered by the party with reference to transportation and other charges administration charges and other charges which are liable to Service tax and separate bills have also been issued. He said that the very issue had come up for consideration before the Commissioner (Appeals) for the subsequent period and Commissioner has analysed this point properly as can be seen from his Order Nos. 24 and 25/03/ST, dated 31-3-2003. He drew my attention to Para 5 of the said order which is as under ;
"5. The impugned orders, appeals and submissions made at the time of personal hearing have all been carefully considered by me. The appellant functions as the C&F agent for M/s. Tata Tea Ltd., and M/s. Consolidated Coffee Ltd., under a contract. Separate contract has been entered into for transportation also. The issue to be decided here is whether the transportation charges will form part of the value of taxable service for the purpose of service tax on C&F agents. As per the data furnished by the appellant it is seen that in respect of transportation, the rate fixed is per kilogram of tea transported per carton of jam transported etc., Separate bill is being raised in respect of administration charges, telephone, stationery, postage and courier, month wise. The appellant is charging Service Tax on such bills only. The appellant has also produced a letter dated February 10th, 2001 of M/s. Tata Tea Ltd., wherein as per the appellants request the remuneration for C&F work is enhanced from Rs. 5000/- to Rs. 7000/- with effect from 1-1-2001 and valid till 31-3-2003. The value of taxable service rendered by a C&F agent is the gross amount charged by such agent from the client for the service of clearing and forwarding operations in any manner. The Service Tax will be computed on the gross amount of remuneration or commission paid to the C&F agent by the principal engaging such an agent. Further this commission/remuneration can be on the basis of a minimum on a flat rate or turnover basis depending on the consignments handled. It can also be variable based on performance. The appellant is found to be receiving for the C&F service provided by him to M/s. Tata Tea and Consolidated Coffee. As such Service Tax is to be levied only on this remuneration and not on transportation which is a separate activity governed by a separate agreement. In view of the observations, I pass the following order."
3. Heard Shri Narasimha Murthy learned DR for the Revenue. He justified the action of the Department in raising the demand and rejecting the refund claim. Alternatively he urged that even if service tax is not leviable on transportation charges being separate bills have been issued, nevertheless the refund claim is subject to the Provisions of Unjust Enrichment which requires to be reconsidered.
4. I have carefully considered the submissions made by both sides. On going through the reason given by the Commissioner (Appeals) in the subsequent order with reference to the same facts and circumstances I do not find any justification for levy of service tax on transportation charges. Accordingly, party is entitled to refund of the said amount. Further in view of the submissions made by the DR, the position with reference to the unjust enrichment may be examined by the adjudicating authority. Thus these two appeals are disposed of in the above terms.