Custom, Excise & Service Tax Tribunal
Mahanandi Coalfields Ltd, vs Coms,C.Ex,Cus &Amp; S.Tax - Bbsr-I on 13 November, 2018
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL,
EAST REGIONAL BENCH : KOLKATA
Appeal Nos.1) ST/299/2009, 2) ST/128/2010, 3)ST/486/2012, 4)
ST/75007/2018
(Arising out of
1)Order-in-Original No.Commr/BBSR-I/ST-07/2009 dated 31.08.2009,
2)Order-in-Original No.Commr/BBSR-I/ST-02/2010 dated 23.02.2010,
3)Order-in-Original No.Commr/BBSR-I/ST-11-14/2012 dated 31.07.2012
all passed by the Commissioner of Central Excise, Customs & Service Tax,
Bhubaneswar-I
4) Order-in-Appeal No.14/ST/RKL-COM/2017 dated 16.10.2017 passed by
the Commissioner (Appeals), GST, CX & Customs, Bhubaneswar)
M/s Mahanadi Coalfields Ltd.
...APPELLANT(S)
VERSUS
Commissioner of Central Excise & Service Tax, BBSR-I
...RESPONDENT (S)
APPEARANCE Shri Rajeev Kr. Agarwal, CA for the Appellant Shri A.Roy, Suptd.(AR) for the Respondent.
CORAM:
HON'BLE SHRI P. K. CHOUDHARY, JUDICIAL MEMBER Hon'ble SHRI V.Padmanabhan, Member (Technical) Date of Hearing/Decision : 13.11.2018 ORDER NO.FO/76896-76899/2018 Per Bench :
These four appeals deal with the same issue covering the period of dispute from April, 2003 to November, 2012 as per the following details:
Appeal No. Service Tax Interest Penalty Penalty U/S Penalty Penalty
Demanded U/S 75 for 78 U/S 77 U/S 76
(including violation (in Rs.) (in Rs.)
cess) of Section
(in Rs.) 69 (in
Rs.)
ST/299/2009 2,50,43,190 Imposed Nil 2,50,43,190 1000/- Imposed
/- but not /- but not
quantified quantified
ST/128/2010 1,37,88,476 Imposed Nil 1,37,88,476 1000/- Nil
2
Appeal Nos.ST/299/09, ST/128/10, ST/486/12, ST/75007/18 /- but not /-
quantified
ST/486/2012 1,90,47,187 Imposed 5000/- Nil Nil Imposed
/- but not but not
quantified quantified
ST/75007/20 46,11,971/- Imposed Nil Nil 10,000/- Imposed
18 but not but not
quantified quantified
These appeals are being disposed off with a common order for the sake of convenience.
2. The appellant is engaged in the business of mining and selling of coal at the mines located in the State of Orissa. In the course of business, the appellant entered into a Coal Supply Agreement with M/s NALCO on 15.04.2002 to supply coal. As per the terms of the agreement the appellant was required to supply the coal loaded in the Railway Wagons which was to be considered as delivery point. For loading the coal on to the railway wagons, the appellant made use of Rapid Loading System using mechanical transfer from silo to wagons. Towards this facility they recovered additional charge on per Metric Tonne basis of coal sold, referring the same as "Silo Charges". Since during the period under dispute the appellant was found to have issued separate invoices to collect silo charges, the department was of the view that the appellant was acting as a Cargo Handling Agent of the buyer i.e. M/s NALCO and the silo charges will be liable to payment of service tax under the category of Cargo Handling Services. Accordingly, after issue of various show cause notices covering the period of dispute, the impugned adjudication orders were passed confirming the demand for payment of service tax alongwith interest. In a few cases penalties have also been levied under various sections of the Finance Act, 1994. The four impugned Orders-in-Original are under challenge in these appeals.
3
Appeal Nos.ST/299/09, ST/128/10, ST/486/12, ST/75007/18
3. With this background we heard Shri Rajeev Kr. Agarwal, CA for the Appellant and Shri A.Roy, Suptd.(AR) for the Respondent.
4. Ld. CA submitted as follows :
(i) He emphasized the terms of the agreement with the buyer and submitted that the delivery point for supply of coal was the railway wagon. Accordingly, the transaction value for sale of coal is to be considered as the value at the wagons. He also submitted that for the sale of coal, the sales tax was payable to the respective State Government. During the period under dispute, the appellant initially discharged sales tax without including the silo charges, but subsequently the sales tax on the value of silo charges have also been paid to the respective State Governments.
ii) With effect from 01.04.2011, the Central Excise duty is also payable on coal which is mined and for payment of such excise duty the value of coal including the silo charges have been considered as the transaction value.
iii) For the periods subsequent to the period of dispute, the Jurisdictional Commissioner himself has dropped the demand for service tax vide Order-in-Original No.6/2016-2017 dated 26.08.2016.
iv) He relied on the following case laws:
a) Northern Coalfields Ltd. vs. CGST, CC&C.Ex, Jabalpur, Final Order No.52911-52920/2018 dated 31.08.2018 of the Delhi Bench Tribunal.
b) Eastern Coalfields Ltd. vs. Comm. Of C.Ex & S.Tax, Bolpur, Final Order No.77233/2017 dated 29.08.2017 of the Kolkata Bench Tribunal.4
Appeal Nos.ST/299/09, ST/128/10, ST/486/12, ST/75007/18
v) He also relied on the decision of the Hon'ble Supreme Court in the case of Bharat Sanchar Nigam Ltd. vs. Union of India [2006(2) STR 161 (S.C.)], in which the Apex Court observed that sales tax and service tax cannot be made applicable on the same transaction as these are mutually exclusive.
5. Ld. DR justified the impugned orders.
6. Heard both sides and perused the appeal records.
7. During the period under dispute, the appellant supplied coal to the purchaser M/s. NALCO in terms of the agreement dated 15.04.2002. As per the agreement the appellant was required to deliver the coal at the Railway Wagon after loading the same using Rapid Loading System. The charges towards such loading were recovered by the appellant under separate invoices, describing the same as 'silo loading charges'. The department has taken the view that such charges would be liable to payment of service tax under the category of Cargo Handling Services. Such levy of service tax is strongly contested by the appellant. It is their case that the sale of coal is completed only at the point of delivery at the railway wagon. The price for delivery at the wagon will include not only the price charged for coal but also the silo charges. From the records it is seen that the appellant has paid sales tax not only on the transaction price of coal but also on the silo loading charges.
8. We note that similar disputes have come up before this Bench as well as Delhi Bench of the Tribunal. These appeals have dealt with the various charges recovered by the appellant as well as by subsidiaries of Coal India Ltd. In the case of Eastern Coalfields Ltd., the Tribunal, while setting aside the demand for service tax has observed as follows:
"4. After hearing both the parties it appears that the applicants had paid the sales tax/vat on total amount of sale 5 Appeal Nos.ST/299/09, ST/128/10, ST/486/12, ST/75007/18 including crushing charges as well as other charges e.g. silo loading charges and the same was shown in the profit and loss account. The Honble Supreme Court in the case of Bharat Sanchar Nigam Ltd. vs. Union of India reported in 2006(2) STR 161 (SC) observed that sales tax and service tax cannot be made applicable on the same transaction as the same is includible to each other.
5. In the instant case undisputedly, the appellant has paid the sales tax/vat, when it is so then crushing charges are not leviable. Regarding the payment of sales tax/vat, the ld. Counsel for the appellant has shown proof to the Ld. Counsel for the Department.
6. By following the ratio laid down by the Honble Supreme Court, we find no reason to sustain the impugned order.
7. In the result, the appeal filed by the department is dismissed.
8. In view of the above we find that the impugned order is not sustainable and is set aside. Consequently, the appeal filed by the appellant is allowed."
9. In view of the above discussions by following the above decision we find no justification for the demand of service tax and hence the impugned orders are set aside and the appeals are allowed.
(Dictated and Pronounced in the Open Court) S/d. S/d.
(P. K. CHOWDHARY) (V.Padmanabhan)
MEMBER (JUDICIAL) MEMBER (TECHNICAL)
ss