Custom, Excise & Service Tax Tribunal
D.S. Narayana & Company Pvt.Ltd vs Commissioner Of Central Excise ... on 26 May, 2015
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL SOUTH ZONAL BENCH CIRCUIT BENCH AT HYDERABAD Appeal(s) Involved: ST/355/2008-DB [Arising out of Order-in-Appeal No. 7-2008-V-II- dated 27/05/2008 passed by CC&CE(Appeals), Visakhapatnam] For approval and signature: HON'BLE SHRI JUSTICE G. RAGHURAM, PRESIDENT HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER 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? D.S. NARAYANA & COMPANY PVT.LTD., #41-8-50/1 DSN COMPLEX, COMMERCIAL ROAD KAKINADA Appellant(s) Versus Commissioner of Central Excise ,Customs and Service Tax VISAKHAPATNAM-I NULL CENTRAL EXCISE BUILDING PORT AREA VISAKHAPATNAM - 530035 ANDHRA PRADESH Respondent(s)
Appearance:
Shri Hari Radhakrishna, Advocate For the Appellant Shri R. Gurunathan, Addl. Commissioner(AR) For the Respondent Date of Hearing: 26/05/2015 Date of Decision: 26/05/2015 CORAM:
HON'BLE SHRI JUSTICE G. RAGHURAM, PRESIDENT HON'BLE SHRI B.S.V.MURTHY, TECHNICAL MEMBER Final Order No. 21483 / 2015 Per : B.S.V. MURTHY The appellant is a service provider in the category of Customs House Agent (CHA) and steamer agent(SA). They have paid service tax for the services rendered as CHA and SA. After verification of records of the appellant, proceedings were initiated taking a view that the appellant was providing C&F agency service, cargo handling service and was not paying service tax on the same. However it was also observed that they were collecting certain amounts apart from agency service and service tax was not paid on such amounts collected. On this ground, proceedings were initiated resulting in the impugned order wherein demand for service tax of about Rs.8.9 lakhs has been confirmed and penalties under Sections 76 and 78 have been imposed.
2. Heard both the sides. We find that appellants have claimed that they were collecting amounts for various services such as obtaining space certificate, getting Port Health Officer report, getting warehousing licence, getting extension of warehousing licence, attending warehouse clearances, miscellaneous expenses, supervision expenses, miscellaneous DEPB expense etc. To a specific query from the Bench, learned counsel fairly agreed that for these amounts, the appellant do not have bills and he also could not specifically confirm that these were in the nature of reimbursement of actual expenses incurred by the appellant as a CHA so that the same can be considered as expenses incurred by a pure agent. In the absence of any evidence to show that these were reimbursable expenses and covered by bills and evidences to show that this was actual reimbursement of expenses, it would not be appropriate to consider the claim that the same cannot be charged to service tax. Therefore we consider that service tax of Rs.8,43,226/- with interest liable to be paid on these amounts has to be upheld as demanded.
3. We find that in addition to the above amounts of Rs.15,026/- and Rs.16,924/- have been demanded on the ground that the appellant has provided C&F Agency service. The details of these two demands are as under, as mentioned in the OIO and also giving conclusion therein.
11. Besides the above services, the assessee provided Custom House Agency Services in the year 2004-05 to Sri Bontha Srinivas, Visakhapatnam and M/s.Vijay Agro Products Ltd. In respect of Sri Bontha Srinivas, the assessee raised bill under the heads of Documentation, weighment, repacking, transportation charges, loading/ unloading charges and in respect of M/s Vijay Agro Products Ltd, raised bills under the heads labour charges, Stitcher charges, loading/unloading charges, Misc. expenses, security charges, barge hire charges, fumigation charges. The assessee did not pay any service tax on the amounts collected. It appears that in respect of the above clients the assessee provided Custom House Agency services, received amounts from them and not discharged Service Tax liability on the amounts received. The liability of the assessee on this account is Rs.15026/- of service tax and Education Cess of Rs.49/-.
12. The assessee provided C&F services to M/s Lotus Marine services Pvt. Ltd., Kakinada in the year 2002-03 and raised bills under the heads- Rebagging, Shifting charges, loading charges, Handling charges, etc. Sri. D.Surya Rao, in his statement dt.10.04.06 admitted that they provided C&F agency services to M/s Lotus Marine in respect of handling their cargo. They have not paid any Service Tax on the value of these services. It appears that the he assessee provided C&F Agency services to the above clients, received amounts from them and not discharged Service Tax liability on the amounts. received. The service tax liability of the assessee on this account is Rs.16,924/-.
4. We do not agree with the view taken by the original authority that the services of documentation, weighment, repacking, transportation charges, loading/unloading charges can be considered as part of CHA service. these activities are undertaken after the goods are cleared and therefore we find that the confirmation of demand is not sustainable.
5. As regards the item in paragraph 12, except for handling the cargo, repacking, shifting, loading and handling, appellants have not undertaken any other activity. It is difficult to consider this as a C&F agency service. The appellants do not undertake the responsibility of clearing and forwarding but have undertaken certain activities which we cannot consider as part of C&F agency service. Therefore, we consider that demand for Rs.16,924/- also cannot be sustained.
6. In Paragraph 13 & 14, two more demands under storage and warehousing service and steamer agency service have been confirmed and the observation of the original authority are reproduced below:-
13. The assessee also provided storage and warehousing services to M/s. Agarwal Industries Ltd., Hyderabad during the year 2003-04 and raised rills under the heads of handling, servicing charges, delivery charges, godown rent, etc. Sri D. Suryanrayana in his statement dt. 10.04.06 admitted that they provided C&F agency services to M/s. Agarwal Industries Ltd. Hence it appears that in respect of cargo of M/s Agarwal, the assessee provided C&F services which involves handling of cargo, combined with storage facilities and this service as a whole falls under Storage and Warehousing services. Further it appears that the assessee received amounts from their clients towards the above services and not discharged Service Tax liability on the amounts received. The liability of the assessee on this account is Rs.13,003/-.
14. The assessee further provided Steamer agency services to M/s Imperial Shipping Pvt. Ltd., Chennai in the year 2001-02 and raised bills for the same under the heads of Agency Commission and sign on & sign off charges. However the assessee did not pay any Service Tax on the value of this service. It appears that the assessee provided Steamer agency services to the above client, received amounts under the above heads from the client towards the value of services rendered in respect of vessels and not discharged Service Tax liability on the amounts received. The service tax liability of the assessee on this account is Rs. 2,752/-.
We find that these demands are sustainable and we agree with the reasons given by the original authority.
7. In view of the above discussion except for the two amounts wherein we have allowed the appeal, in respect of remaining amounts demanded, impugned order is sustained and demand with interest for service tax is upheld. We also notice that penalty has been imposed under Section 76 as well as Section 78 of Finance Act, 1994. It is settled law that penalties under Sections 76 and 78 both cannot be imposed. Therefore we consider that penalty under Section 78 equal to the service tax demand upheld by us would meet ends of justice and penalty under Section 76 need not be imposed. The appeal is disposed of in above terms.
(Operative part of this order pronounced On conclusion of the hearing) JUSTICE G. RAGHURAM PRESIDENT B.S.V.MURTHY TECHNICAL MEMBER Raja.,.
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