Custom, Excise & Service Tax Tribunal
Cce, Lucknow vs M/S.Shree Bhawani Paper Mills on 23 May, 2011
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Appeal No.ST/266/2008-Cus with ST/CO/251/08
(Arising out of Order-in-Appeal No.04-CE/LKO/08 dated 31.01.2008 passed by the CCE(A), Lucknow)
For approval and signature:
Honble Mrs.Archana Wadhawa
Honble Mr.M.Veeraiyan, 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 should 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 Departmental authorities?
CCE, Lucknow Appellants
Vs.
M/s.Shree Bhawani Paper Mills Respondent
Present for the Appellant: Shri Sonal Bajaj, SDR
Present for the Respondent: Ms.Nupur Maheshwari, Advocate
Coram: Honble Mrs.Archana Wadhawa, Member (Judicial)
Honble Mr.M.Veeraiyan, Member (Technical)
Date of Hearing: 19.04.2011
Date of decision: 31.05.2011
ORDER NO._______________
PER: M.VEERAIYAN
ST/266/08 is by the department against the order of the Commissioner (Appeals) No.04-CE/LKO/08 dt.30.01.08. Cross objection No.ST/CO/251/08 is connected to this appeal.
2. Heard both sides.
3.1 The relevant facts in brief are that the respondent is a manufacturer paper and paper board. During the period October, 97 to October, 98, they sold the product either at the factory gate or through consignment agents appointed by them. For this purpose, they had entered into agreements with M/s.Allora Paper Products, Delhi , M/s.Chawdhary Industries Pvt. Ltd., Kolkata and M/s.Mannu Papers at Amritsar and Jalandhar. The relevant portions of the agreement are reproduced below:
5(a) That, the Principal undertake to dispatch its product to the Consignment Agents godown at DELHI in such quantities as may be requisitioned by the Consignment Agent in writing from time to time as per the requirement of market. Such goods shall be dispatched on consignment basis and the Consignment Agent shall furnish Form F prescribed under the Central Sales Tax Laws to the Principal in respect of the stock transfer of the product. Unless the Form F is not being furnished to the Principal the title of product shall not be transferred in the name of Consignment Agent.
(b) That, the Consignment Agent shall keep all usual and proper records relating to the products of the principal which shall be delivered to them by the principals from time to time.
(c) That, the consignment agent shall also maintain the complete details of the goods received from the Principals, the sale made from time to time to various persons in their territory, the sale proceeds realized by them including the expenses incurred in connection with the said sale.
6. That, the Principal shall pay to the said selling consignment Agent the commission @ Rs.300/- at the net sales realization while will be arrived at after deducting from the gross amount, the freight, insurance, octroi and other expenses and charges etc.
8. That, the principal will have the running account of the Consignment Agent in his Company and the amount received from time to time from the Consignment Agent will be credited to his account and the due credit will be given in respect of the dale proceeds realized by him which he is required to remit immediately on the sales being completed.
The amount received from the consignment agent will be credited by the Principal in the running account of the Consignment Agent and the due credit will be given in respect of the amounts which are liable to be remitted by the Consignment Agent towards the sale proceeds of the various goods sold by the Consignment Agent on behalf of the Principals and which he is bound to remit immediately on the completion of the sale.
9. The Agent shall arrange to take delivery of the above goods from the Railways/Carriers, pay octroi duty etc. If applicable, on behalf of the Principal and also arrange for safe storage of the materials and sell the products to parties at such price together with freight, octroi and other local taxes and delivery expenses sand on such other terms and conditions as advised from time to time by the Principal.
10. That, the Consignment Agent shall comply with and abide by the rules and regulations, orders, provisions and law of the local authorities. State order/or Union Government and in particular discharging of the obligations under sales tax, octroi and other laws and rules thereunder.
11. That the Consignment Agent undertake sole responsibility for collection and deposit of sales tax or any other tax on the sale of the Product within his territory and also prepare and submit Sales Tax Returns, do all the formalities and necessary compliance as required under the tax laws of the Centre and State. The Principal shall not be responsible in respect of sales tax or any other tax matters after transfer of title of the product.
3.2 A show cause notice dated 9.1.03 was issued proposing recovery of service tax under the category of C & F agent as the term C & F included consignment agent in terms of Section 65(25) of Finance Act, 1994. Show cause notice also containeed a proposal to appropriate Rs.1,21,867/- alongwith interest of Rs.1,09,644/-. The matter was adjudicated by original authority on 26.10.04 and the order was set aside by the Commissioner (Appeals) vide dated 28.10.05 and remanded to original authority for fresh consideration. In pursuance of the remand order, original authority vide order dated 4.7.07 dropped the demand of service tax and interest. On appeal by the department, Commissioner (Appeals) has upheld the said order. Hence, the department is in appeal and the respondent has filed the cross objection basically supporting the order of the Commissioner (Appeals).
4.1 Ld.SDR reiterates the grounds of appeal and draws our attention to the prayer which reads as under:
The impugned order in original and the order in appeal may kindly be set aside and the case may be referred to with direction to adjudicating authority for de no consideration. 4.2 He also relies on the decision Honble High Court of Karnataka in the case of CCE, Bangalore vs, Mahaveer Generics reported 2010 (17) STR 225 (kar)
5. Learned advocate reiterates the grounds in the cross objection and seeks upholding the order of the Commissioner (Appeals).
6.1 We have carefully considered the submissions and perused the records. The original authority relying on the decision of the Tribunal in the case of Mahaveer Generic vs. CCE 2004 (170) ELT 78 given a finding that the agreement involved in the case of Mahaveer Generics cited supra and the agreement in the present case are the same except that in agreement between Bhawani paper mills and their agents there is a provision in para 9 that the agent shall arrange to take delivery of the above goods from the railways/carrier, pay octroi duty. Where as in the agreement in Mahaveer Generics and M/s.Cipla Ltd. There was no such clause. The Commissioner (Appeals) also held that the original authority was right in following the decision in the case of Mahaveer Generics inasmuch as the same has not been set aside by a higher forum.
6.2 As submitted by the learned SDR, the decision of the Tribunal in the case of Mahaveer Generics stands overruled by the Honble Karnataka High Court. Since the Commissioner (Appeals) and the original authority decided on merits in favour of the respondents relying on the said decision of the Tribunal and no other issues were discussed, we deem it appropriate to accede to request of the department for de novo consideration by the original authority.
6.3 To enable the same, we set aside the order of the Commissioner (Appeals) and that of the original authority and remand the matter to the original authority for fresh consideration in the light of decision of the Honble High Court of Karnataka in the case of Mahaveer Generics. All issues are kept open 6.4 The appeal is allowed by way of remand. Cross objection is also disposed of.
(Pronounced in the open court on 31.05.2011) (ARCHANA WADHWA) MEMBER (JUDICIAL (M.VEERAIYAN) MEMEBR (TECHNICAL) mk 5