Custom, Excise & Service Tax Tribunal
Visakhapatnam-I vs Neha Constructions Pvt Ltd on 27 September, 2018
(1) Appeal No. ST/1815/2010
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Division Bench
Court - I
Appeal No. ST/1815/2010
(Arising out of Orders-in-Original No. 27/2010 (RS), dated 13.05.2010 passed by CCE, C&ST,
Visakhapatnam-I Commissionerate)
CCE & CC, Visakhapatnam ..... Appellant(s)
Vs.
NEHA CONSTRUCTIONS PVT. LTD ..... Respondent(s)
Appearance Shri A.V.L.N. Chary, Superintendent/AR for the Appellant. Shri D. Suresh Sastry, Chartered Accountant for the Respondent. Coram:
Hon'ble Mr. M.V. RAVINDRAN, MEMBER (JUDICIAL) Hon'ble Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) Date of Hearing: 27.09.2018 Date of Decision: 27.09.2018 FINAL ORDER No.A/31258/2018 [Order per: P.V. Subba Rao]
1. This appeal has been preferred by Revenue against Order-in-Original No. 27/2010 (RS), dated 13.05.2010, passed by the original authority dropping the proceedings initiated in the show cause notice.
2. Heard both sides and perused the records.
(2) Appeal No. ST/1815/2010
3. The facts of the case, in brief, are that the respondent herein were engaged in providing some services to M/s Rashtriya Ispat Nigam Limited (RINL) and JSW Steel Limited (JSWSL) and have been receiving payments for such services. During the manufacture of steel products in RINL and JSWSL, many varieties of scrap like steel scrap, maintenance scrap, reheated/defective bloom scrap, CI scrap, slag scrap etc. are generated. RINL and JSWSL awarded the work relating to scrap recovery processing and transportation to the appellant through work orders. The appellant has been carrying on this work. The show cause notice proposed to charge service tax on these services under the head "Business Support Service", which is defined as follows in Section 65(105)(zzzq) of Finance Act, 1994:
"business support service" is a service to any person by any other person in relation to support services of business or commerce, in any manner."
4. Hence, it appeared to the authorities that the services rendered by the respondent amount to business support service on which they have not discharged the service tax liability. Therefore, the show cause notice proposed to recover service tax along with interest from the appellant. It also proposed to recover interest under section 75 and impose penalties under sections 76, 77 & 78 of the Finance Act, 1994. This show cause notice was issued by the Additional Director General of Directorate General of Central Excise Intelligence, Chennai. After following due process, the (3)) Appeal No. ST/1815/2010 original authority found that the nature of services rendered by the respondent herein cannot be termed as business support and no service tax can be levied on them. The relevant portions of the order are reproduced below:
(4)) Appeal No. ST/1815/2010
5. She, therefore
therefore, dropped all proceedings
edings in the Show Cause Notice.
Hence
ence this appeal by the Revenue on the following grounds:
a) A plain reading of the work order executed shows that the assessee was providing services such as collection, segregation, cleaning, magnetic separation, cutting, loading, transportation, dozing, cooling, stocking, screening etc. of scraps. They were using heavy machinery to carry out these activities alongwith skilled and semi skilled labour.
b) Thus, by these methods, the respondent herein had assisted their customers through cost effective methods to sell their scrap and therefore these operations fall under the category of business support services.
c) The demand is therefore sustainable alongwith interest and so are the interest and penalties penalties.
(5) Appeal No. ST/1815/2010 In their cross objection, the respondent herein supported the impugned order and argued that the activities undertaken by them cannot be called as business support services within the meaning of the term under service tax act.
6. We have considered the arguments on both sides and perused the records. The activity undertaken by the respondent herein is removal of scrap and slag generated during the manufacturing premises of the steel manufacturers i.e. RINL and JSWSL. It is evident from the Order-in- Original that on similar issue in the case of M/s Ferro Scrap Nigam Limited for the services rendered to Bokaro Steel Plant, a show cause notice was issued seeking to classify them as "business auxiliary service" which has not been upheld during the adjudication proceedings. When this failed, DGCEI sought to classify the same under business support service which was a later thought. It has been rightly observed that the Commissioner in the impugned order that 11 services were specifically covered in the business support service viz: evaluation of prospective customers, telemarketing, processing of purchase orders and fulfilment services, information and tracking of delivery schedules, managing distribution and logistics, customer relationship management services, accounting and processing of transactions, operational assistance for marketing, formulation of customer service and pricing policies, infrastructural support services and other transaction processing. The term "infrastructural support services" was explained as providing office utilities, lounge, (6) Appeal No. ST/1815/2010 reception with competent personnel to handle messages, secretarial services, internet and telecom facilities, pantry and security". The original authority has rightly observed that the activities undertaken by the respondent herein do not fall in the category of the services mentioned in the business support service or closely associated with them. Therefore, we find no infirmity in the impugned order. In conclusion, we find that the appeal is liable to be rejected and the impugned order upheld and we do so.
7. Impugned order is upheld and appeal is rejected. (Operative portion of the order pronounced in open court on conclusion of hearing) (P.VENKATA SUBBA RAO) (M.V. RAVINDRAN) MEMBER (TECHNICAL) MEMBER (JUDICIAL) vrg