Custom, Excise & Service Tax Tribunal
M/S Deepak & Co vs Cce, New Delhi on 9 May, 2014
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No. 2, R.K. Puram, New Delhi 110 066. Principal Bench, New Delhi COURT NO. I DATE OF HEARING/DECISION : 09/05/2014. Service Tax Appeal No. 698 of 2012 [Arising out of the Order-in-Appeal No. 499/S.Tax/Appl/D-II/2010/395 dated 22/02/2012 passed by The Commissioner of Central Excise (Appeals), New Delhi.] For Approval and signature : Honble Shri Justice G. Raghuram, President Honble Shri Rakesh Kumar, 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 would 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 : Department Authorities? M/s Deepak & Co. Appellant Versus CCE, New Delhi Respondent
Appearance Shri Anand Mishra (Proxy Counsel), Advocate for the appellant.
Shri Sanjay Jain, Authorized Representative (DR) for the Respondent.
CORAM : Honble Shri Justice G. Raghuram, President Honble Shri Rakesh Kumar, Member (Technical) Final Order No. 52292/2014 Dated : 09/05/2014 Per. Rakesh Kumar :-
The facts leading to filing of this appeal are, in brief, as under.
1.1 The appellant specializes in supplying food to train passengers. Apart from this activity, they are also engaged in supplying of bed rolls to the passengers and cleaning of the coaches and toilets of the trains. The period of dispute in this case is from May 2007 to 31/12/2008. Prior to 1999-2000, the Indian Railway itself used to give contracts to various persons like the appellant for supply of food on board the trains, supply of bed rolls etc. Subsequently Indian Railways Catering and Tourism Corporation Ltd. (IRCTC) was set up which is fully owned by the Ministry of Railways. W.e.f. September 1999, it is IRCTC which was responsible for organizing the catering and hospitality services on board the trains. They act as a licencing authority of Indian Railways to arrange for private entrepreneurs to undertake various onboard activities relating to the services to be provided on board the trains. The appellant were awarded licence by IRCTC to supply food and bed rolls to passengers in certain trains and also for cleaning of the coaches and toilets in those trains. For cleaning of coaches and toilets, the appellant receive an amount from IRCTC on per coach basis which varies according to the duration of the journey from the starting station to the terminus. For supplying bed rolls to non ACs coaches, the appellant were charging a specified amount from the passengers, 12% of which was being paid to IRCTC as licence fee and the balance was being retained by them in respect of supply of bed rolls to passengers. In respect of AC coaches, the appellant were receiving a specified amount per bed roll from IRCTC. The Department was of the view that the appellant are providing the support services of business or commerce taxable under Section 65 (zzzq) readwith Section 65 (104c) of the Finance Act, 1994 and accordingly they would be liable to pay service tax on the amount being received by them from IRCTC. It is on this basis that a show cause notice dated 01/05/09 was issued to the appellant for demand of service tax amounting to Rs. 12,67,522/- from them in respect of business support service alleged to have been provided to IRCTC during period from May 2007 to 31/12/08 alongwith interest thereon Section 75 of the Finance Act, 1994 and also for imposition of penalty on them under Section 76, 77 and 78 ibid.
1.2 The show cause notice was adjudicated by the Additional Commissioner vide order-in-original dated 27/04/10 by which the service tax demand of Rs. 12,67,522/- was confirmed alongwith interest and beside this, penalty of equal amount was imposed on them under Section 78 and penalty of Rs. 1,000/- was imposed under Section 77. On appeal being filed to Commissioner (Appeals) against this order of the Additional Commissioner, the Commissioner (Appeals) vide order-in-appeal dated 22/2/12 dismissed the appeal. Against this order of the Commissioner (Appeals), this appeal has been filed.
2. Heard both the sides.
3. Shri Anand Mishra, Advocate, proxy Counsel appearing for the appellant, pleaded that the appellants activity is supply of bed rolls to passengers on board the trains and cleaning of coaches and toilets for which they receive remuneration at specified rates from IRCTC, that this activity of the appellant has been treated as business support service taxable under Section 65 (105) (zzzq) readwith Section 65 (104c) of the Finance Act, 1994, that this activity of the appellant is not in the nature of support service of the business or commerce, that the Commissioner (Appeals) himself in para 9 and 10 of the impugned order has given a finding that the services provided by the appellant are not support service of business or commerce and has given a finding that the appellants activity is classifiable as business auxiliary service under Section 65 (105) (zzb) readwith Section 65 (19) ibid and has confirmed the demand on this basis, that the Commissioner (Appeals) has gone beyond the allegation made in the show cause notice, which is not permissible, as the appellant had never been put on notice about taxability of their services under Section 65 (105) (zzb) readwith Section 65 (19) as business auxiliary service and from the very beginning their stand was that their activity is not covered by the definition of support service of business or commerce and, in fact, is not covered by any other clause of 65 (105). He, therefore, pleaded that the impugned order is not sustainable.
4. Shri Sanjay Jain, the learned DR, defended the impugned order by reiterating the findings of the Commissioner (Appeals) and pleaded that the services provided by the appellant are business auxiliary service covered by clause (vi) of Section 65 (19) in as much as they have provided the services to passengers on behalf of IRCTC for which they have received remuneration from IRCTC. He, therefore, pleaded that there is no infirmity in the impugned order.
5. We have considered the submissions from both the sides and perused the records.
6. The show cause notice had been issued on the basis that the activity of the appellant cleaning of coaches and toilets of certain trains and supply of bed rolls to the passengers of ACs coaches is the support service of business or commerce covered by Section 65 (105) (zzzq) readwith Section 65 (104c) of the Finance Act, 1994. There is no allegation in the show cause notice that in the alternative the Appellants services may be taxable as business auxiliary service under Section 65 (105) (zzb) readwith Section 65 (19) (vi). The Commissioner (Appeals) in the impugned order after giving a finding that the Appellants activity is not support service of business or commerce has gone on to examine the taxability of their activity as business auxiliary service under Section 65 (105) (zzb) readwith Section 65 (19) and in doing so, he has traveled beyond the scope of show cause notice which is not permissible in view of the judgment of the Apex court in the cases of CCE, Nagpur vs. Ballaspur Industries Ltd. reported in 2007 (215) E.L.T. 489 (S.C.) and CCE, Bangalore vs. Brindavan Beverages (P) Ltd. reported in 2007 (213) E.L.T. 487 (S.C.). In view of this, the impugned order is not sustainable. The same is set aside. The appeal is allowed.
(Operative part of the order pronounced in the open court.) (Justice G. Raghuram) President (Rakesh Kumar) Member (Technical) PK ??
??
??
??
6