Custom, Excise & Service Tax Tribunal
Cce,C&St, Cochin vs M/S. Parkson Estates & Industries on 20 January, 2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SOUTH ZONAL BENCH AT BANGALORE
Bench Division Bench
Court I
Date of Hearing: 20/01/2011
Date of decision:20/01/2011
Appeal No.ST/646 & 647/09
(Arising out of Order-in-Appeal No.48 & 49/2009 Service Tax dt. 15/04/2009 passed by CCE,C&ST(Appeals), Cochin )
For approval and signature:
Honble Mr. M.V.Ravindran, Member(Judicial)
Honble Mr. P.Karthikeyan, 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?
No
2.
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordship wish to see the fair copy of the Order?
Seen
4.
Whether Order is to be circulated to the Departmental authorities?
Yes
CCE,C&ST, Cochin
..Appellant(s)
Vs.
M/s. Parkson Estates & Industries
..Respondent(s)
Appearance Mr. M.M. Ravi Rajendran, JDR for the Revenue.
Ms. Rukmani Menon, Advocate for the respondent.
Coram:
Honble Mr. M.V.Ravindran, Member(Judicial) Honble Mr. P.Karthikeyan, Member(Technical) FINAL ORDER No._______________________2011 Per M.V.Ravindran These two appeals are filed by the Revenue against the Order-in-Appeal No.48 & 49/2009 Service Tax dt. 15/04/2009.
2. The relevant facts that arise for consideration are that the respondent herein were engaged in 1) providing bulk storage facility in the warehouse for tea and 2) blending and packing of tea. The respondent informed the lower authorities by the letter dt. 8/2/2007 that since they are dealing with tea, which is an agricultural product, they were exempt from payment of service tax and requested the Assistant Commissioner of Central Excise, Service Tax Division to issue a clarification regarding their service tax liability in respect the above mentioned services. The Assistant Commissioner vide letter dt. 19/2/2007 intimated the respondent/assessee that services rendered by them are liable to service tax under (i) storage & warehousing and (ii) packing services & cargo handling service and directed them to pay the service tax immediately. Show-cause notices were issued to the respondent/assessee demanding the service tax under both the services. The said show-cause notices were contested by the respondent/assessee before the adjudicating authority. The adjudicating authority after considering the submissions made before him held against the assessee and confirmed the demands. Aggrieved by such orders, assessee preferred appeals before the ld. Commissioner(Appeals). Ld. Commissioner(Appeals), by a common order set aside the Orders-in-original. Hence these appeals.
3. Ld. DR would submit and reiterate the grounds of appeal, which are reproduced hereunder:-
a) It is submitted that the finding of the Commissioner(Appeals) that if the value of blending is excluded then it appears that in all the financial years the value of packaging only will be under the exemption limit of Notification No.6/2005 dt. 1/3/2005 as amended from time to time is not based on facts as the value of packaging alone was not made available for consideration.
b) It is submitted that Commissioner(Appeals) has erred in holding that the packaging services provided by the assessee is eligible for the exemption under Notification No.6/2005 for the period covered under the show cause notice. In this connection, it is submitted that Notification No.6/2005 is effective from 1/3/2005 onwards whereas the period covered in the show cuase notice is for the period from 2002-03 onwards.
c) It is submitted that the finding of Commissioner(Appeals) that packaging of tea gets exemption under Section 65(76b) of the Finance Act, 1994 is not correct as packing of tea does not amount to manufacture as per clause 2(f) of Section 2 of the Central Excise Act, 1944. The reliance placed on Circular No.489/55/99-Cx. dt. 13/10/1999 is not proper as the said circular, issued in the context of rebate of Excise duty available to exporter, specifically states that processes which do not conform to manufacture as per Central Excise Act have been included for export benefits.
4. Ld. Counsel on the other hand would submit that the Revenue has only contested the service tax liability on the packaging services. It is her submission that the ld. Commissioner(Appeals) has not given any findings on the ground raised before him. It is her submission that the Revenue has not challenged the service tax liability on the appellant on the storage and warehousing of tea.
5. On careful consideration of the submissions made by both sides and perusal of the records, we find that ld. Commissioner(Appeals) has set aside the demand of service on the appellant on the category of storage & warehousing of tea by holding that the exemption under order No.1/2002/ST dt. 1/8/2002 will be available as the tea is a agricultural produce. We find from the grounds of appeal (as herein reproduced above) that the Revenue has not challenged these findings of facts of ld. Commissioner(Appeals). In the absence of any challenge to the setting aside of the service tax liability on the storage & warehousing services, we uphold that portion of the impugned order which is in favour of the respondent/assessee as regards the storage & warehousing services and it is held that the respondent/ assessee is not liable for service tax under the category of storage & warehousing of tea.
6. As regards the service tax liability on the packaging services, we find that the findings recorded by the ld. Commissioner(Appeals) are very sketchy. It is seen that the ld. Commissioner(Appeals) has mixed up the value and the taxability together and has not recorded any findings. In view of this, we are unable to go into this aspect and hence we set aside the impugned order to that extent it upholds that the respondent/assessee is not liable to pay the service tax liability on the packaging services and remand the matter back to the adjudicating authority to re-consider the issue afresh after following the principles of natural justice.
7. Appeals are disposed as indicated herein above.
(Operative portion of this order pronounced on conclusion of the hearing) (P.KARTHIKEYAN) MEMBER (TECHNICAL) (M.V.RAVINDRAN) MEMBER (JUDICIAL) Nr 5